Save & Exit 2 Part 2 of 2 insurance deductible, she paid the entire cost of the repairs. Reba wasn't able to work for two months after the accident. Fortunately, she received $2,000 from her disability Insurance. Her employer, the Central Georgia School District, paid 60 percent of the premiums on the policy as a nontaxable fringe benefit and Reba paid the remaining 40 percent portion A few years ago, Reba acquired several investments with her portion of the divorce settlement. This year she reported the following income from her investments: $2,200 of interest income from corporate bonds and $1,500 interest income from City of Denver municipal bonds. Overall, Reba's stock portfolio appreciated by $12,000, but she did not sell any of her stocks. Heather reported $6,200 of interest income from corporate bonds she received as gifts from her father over the last several years. This was Heather's only source of income for the year. Reba had $10,000 of federal income taxes withheld by her employer. Heather made $1,000 of estimated tax payments during the year. Reba did not make any estimated payments. Assume Reba received the correct advance payment for her 2021 individual recovery credit. Skipped Required: b. Is Reba allowed to file as a head of household or single? c. Determine the amount of FICA taxes Reba was required to pay on her salary. d. Determine Heather's federal income taxes due or payable. Use Tax Rate Schedule. Dividends and Capital Gains Tax Rates for reference. b. Status of taxpayer C. FICA taxes Individuals Schedule X-Single If taxable income is over: But not over: The tax is: $ 0 $ 9.950 10% of taxable income $ 9,950 $ 40,525 $995 plus 12% of the excess over $9.950 $ 40,525 $ 86,375 $4,664 plus 22% of the excess over $40,525 $ 86,375 $ 164.925 $14.751 plus 24% of the excess over $86,375 $164.925 $ 209,425 $33,603 plus 32% of the excess over $164.925 $ 209,425 $ 523,600 $47,843 plus 35% of the excess over $209,425 $ 523,600 $157,804.25 plus 37% of the excess over $523,600 Schedule Y. 1-Married Filing Jointly or Qualifying Widow(er) If taxable income is over: But not over: The tax is: $ 0 $ 19,900 10% of taxable income $ 19,900 $ 81,050 $1.990 plus 12% of the excess over $19.900 $ 81,050 $ 172,750 $9,328 plus 22% of the excess over $81,050 $ 172,750 $ 329,850 $29,502 plus 24% of the excess over $172.750 $ 329,850 $ 418,850 $67,206 plus 32% of the excess over $329,850 $ 418,850 $ 628,300 $95,686 plus 35% of the excess over $418,850 S628,300 $168,993,50 plus 37% of the excess over $628,300 Schedule Z-Head of Household If taxable income is over: But not over: The tax is: $ 0 $ 14,200 10% of taxable income $ 14,200 $ 54,200 $1,420 plus 12% of the excess over $14,200 $ 54.200 $ 86,350 $6,220 plus 22% of the excess over $54,200 $ 86,350 $ 164,900 $13,293 plus 24% of the excess over $86,350 $ 164,900 $ 209,400 $32,145 plus 32% of the excess over $164.900 $ 209,400 S 523,600 $46,385 plus 35% of the excess over $209,400 $ 523.600 $156,355 plus 37% of the excess over $523,600 Schedule Y-2-Married Filing Separately If taxable income is over: But not over: The tax is: S 0 $9.950 10% of taxable income $ 9.950 $ 40,525 $995 plus 12% of the excess over $9.950 $ 40,525 $ 86,375 $4.664 plus 22% of the excess over $40.525 $ 86,375 $164.925 $14.751 plus 24% of the excess over $86,375 $164.925 S 209.425 $33,603 plus 32% of the excess over $164.925 $ 209,425 $ 314,150 $47,843 plus 35% of the excess over $209,425 $ 314,150 $84.496.75 plus 37% of the excess over $314.150 wed SH Tax Rates for Net Capital Gains and Qualified Dividends che B Taxable Income Rate Married Filing Jointly Married Filing Separately Single Head of Household Trusts and Estates 09 $0-$80.800 0-$40.400 $0-$40,400 $0-$54,100 50 - $2,700 15 580 801 - 5501.600 $40 401 - $250.800 540 401 - $445,850 $54,101 - 5473,750 $2.701 - $13,250 20% $501.601+ $250.801- 5445,851+ $473,751+ $13,251+ *This rate applies to the nel capital gains and qualified dividends that fall within the range of laxable income specified in the table (nel capital gains and qualified dividends are included in taxable income last for this purpose) Reba Dixon is a fifth-grade school teacher who earned a salary of $38,000 in 2021. She is 45 years old and has been divorced for four years. She receives $1,200 of alimony payments each month from her former husband (divorced in 2016). Reba also rents out a small apartment building. This year Reba received $50,000 of rental payments from tenants and she incurred $19,500 of expenses associated with the rental Reba and her daughter Heather (20 years old at the end of the year) moved to Georgia in January of this year. Reba provides more than one-half of Heather's support. They had been living in Colorado for the past 15 years, but ever since her divorce, Reba has been wanting to move back to Georgia to be closer to her family. Luckily, last December, a teaching position opened up and Reba and Heather decided to make the move. Reba paid a moving company $2,010 to move their personal belongings, and she and Heather spent two days driving the 1,426 miles to Georgia. Reba rented a home in Georgia. Heather decided to continue living at home with her mom, but she started attending school full-time in January and throughout the rest of the year at a nearby university She was awarded a $3,000 partial tuition scholarship this year, and Reba helped out by paying the remaining $500 tuition cost. If possible, Reba thought it would be best to claim the education credit for these expenses. Reba wasn't sure if she would have enough items to help her benefit from itemizing on her tax return. However, she kept track of several expenses this year that she thought might qualify if she was able to itemize. Reba paid $5,800 in state income taxes and $12,500 in charitable contributions during the year. She also paid the following medical-related expenses for herself and Heather: Insurance premiums $ 7,952 Medical care expenses $ 1,100 Prescription medicine $ 350 Bonprescription medicine New contact lenses for Heather Shortly after the move, Reba got distracted while driving and she ran into a street sign. The accident caused $900 in damage to the car and gave her whiplash. Because the repairs were less than her Insurance deductible, she paid the entire cost of the repairs. Reba wasn't able to work for two months after the accident. Fortunately, she received $2,000 from her disability insurance. Her employer, the Central Georgia School District, paid 60 percent of the premiums on the policy as a nontaxable fringe benefit and Rebo pold the remaining 40 percent portion A few years ago, Reba acquired several Investments with her portion of the divorce settlement. This year she reported the following income from her investments: $2,200 of interest income from corporate bonds and $1,500 interest income from City of Denver municipal bonds. Overall, Reba's stock portfolio appreciated by $12,000, but she did not sell any of her stocks, Heather reported $6,200 of interest income from corporate bonds she received as gifts from her father over the last several years. This was Heather's only source of income for the year $ 100 $ 200 dler. Insurance premiums $ 7,952 Medical care expenses $ 1,100 Prescription medicine $ 350 Nonprescription medicine $ 100 New contact lenses for Healther $ 200 Shortly after the move, Reba got distracted while driving and she ran into a street sign. The accident caused $900 in damage to the car and gave her whiplash. Because the repairs were less than her insurance deductible, she paid the entire cost of the repairs. Reba wasn't able to work for two months after the accident. Fortunately, she received $2,000 from her disability insurance. Her employer, the Central Georgia School District, paid 60 percent of the premiums on the policy as a nontaxable fringe benefit and Reba paid the remaining 40 percent portion. A few years ago, Reba acquired several investments with her portion of the divorce settlement. This year she reported the following income from her investments: $2,200 of interest income from corporate bonds and $1,500 interest income from City of Denver municipal bonds. Overall, Reba's stock portfolio appreciated by $12,000, but she did not sell any of her stocks. Heather reported $6,200 of interest income from corporate bonds she received as gifts from her father over the last several years. This was Heather's only source of income for the year. Reba had $10,000 of federal income taxes withheld by her employer. Heather made $1,000 of estimated tax payments during the year. Reba did not make any estimated payments. Assume Reba received the correct advance payment for her 2021 individual recovery credit. Save & Exit 2 Part 2 of 2 insurance deductible, she paid the entire cost of the repairs. Reba wasn't able to work for two months after the accident. Fortunately, she received $2,000 from her disability Insurance. Her employer, the Central Georgia School District, paid 60 percent of the premiums on the policy as a nontaxable fringe benefit and Reba paid the remaining 40 percent portion A few years ago, Reba acquired several investments with her portion of the divorce settlement. This year she reported the following income from her investments: $2,200 of interest income from corporate bonds and $1,500 interest income from City of Denver municipal bonds. Overall, Reba's stock portfolio appreciated by $12,000, but she did not sell any of her stocks. Heather reported $6,200 of interest income from corporate bonds she received as gifts from her father over the last several years. This was Heather's only source of income for the year. Reba had $10,000 of federal income taxes withheld by her employer. Heather made $1,000 of estimated tax payments during the year. Reba did not make any estimated payments. Assume Reba received the correct advance payment for her 2021 individual recovery credit. Skipped Required: b. Is Reba allowed to file as a head of household or single? c. Determine the amount of FICA taxes Reba was required to pay on her salary. d. Determine Heather's federal income taxes due or payable. Use Tax Rate Schedule. Dividends and Capital Gains Tax Rates for reference. b. Status of taxpayer C. FICA taxes Individuals Schedule X-Single If taxable income is over: But not over: The tax is: $ 0 $ 9.950 10% of taxable income $ 9,950 $ 40,525 $995 plus 12% of the excess over $9.950 $ 40,525 $ 86,375 $4,664 plus 22% of the excess over $40,525 $ 86,375 $ 164.925 $14.751 plus 24% of the excess over $86,375 $164.925 $ 209,425 $33,603 plus 32% of the excess over $164.925 $ 209,425 $ 523,600 $47,843 plus 35% of the excess over $209,425 $ 523,600 $157,804.25 plus 37% of the excess over $523,600 Schedule Y. 1-Married Filing Jointly or Qualifying Widow(er) If taxable income is over: But not over: The tax is: $ 0 $ 19,900 10% of taxable income $ 19,900 $ 81,050 $1.990 plus 12% of the excess over $19.900 $ 81,050 $ 172,750 $9,328 plus 22% of the excess over $81,050 $ 172,750 $ 329,850 $29,502 plus 24% of the excess over $172.750 $ 329,850 $ 418,850 $67,206 plus 32% of the excess over $329,850 $ 418,850 $ 628,300 $95,686 plus 35% of the excess over $418,850 S628,300 $168,993,50 plus 37% of the excess over $628,300 Schedule Z-Head of Household If taxable income is over: But not over: The tax is: $ 0 $ 14,200 10% of taxable income $ 14,200 $ 54,200 $1,420 plus 12% of the excess over $14,200 $ 54.200 $ 86,350 $6,220 plus 22% of the excess over $54,200 $ 86,350 $ 164,900 $13,293 plus 24% of the excess over $86,350 $ 164,900 $ 209,400 $32,145 plus 32% of the excess over $164.900 $ 209,400 S 523,600 $46,385 plus 35% of the excess over $209,400 $ 523.600 $156,355 plus 37% of the excess over $523,600 Schedule Y-2-Married Filing Separately If taxable income is over: But not over: The tax is: S 0 $9.950 10% of taxable income $ 9.950 $ 40,525 $995 plus 12% of the excess over $9.950 $ 40,525 $ 86,375 $4.664 plus 22% of the excess over $40.525 $ 86,375 $164.925 $14.751 plus 24% of the excess over $86,375 $164.925 S 209.425 $33,603 plus 32% of the excess over $164.925 $ 209,425 $ 314,150 $47,843 plus 35% of the excess over $209,425 $ 314,150 $84.496.75 plus 37% of the excess over $314.150 wed SH Tax Rates for Net Capital Gains and Qualified Dividends che B Taxable Income Rate Married Filing Jointly Married Filing Separately Single Head of Household Trusts and Estates 09 $0-$80.800 0-$40.400 $0-$40,400 $0-$54,100 50 - $2,700 15 580 801 - 5501.600 $40 401 - $250.800 540 401 - $445,850 $54,101 - 5473,750 $2.701 - $13,250 20% $501.601+ $250.801- 5445,851+ $473,751+ $13,251+ *This rate applies to the nel capital gains and qualified dividends that fall within the range of laxable income specified in the table (nel capital gains and qualified dividends are included in taxable income last for this purpose) Reba Dixon is a fifth-grade school teacher who earned a salary of $38,000 in 2021. She is 45 years old and has been divorced for four years. She receives $1,200 of alimony payments each month from her former husband (divorced in 2016). Reba also rents out a small apartment building. This year Reba received $50,000 of rental payments from tenants and she incurred $19,500 of expenses associated with the rental Reba and her daughter Heather (20 years old at the end of the year) moved to Georgia in January of this year. Reba provides more than one-half of Heather's support. They had been living in Colorado for the past 15 years, but ever since her divorce, Reba has been wanting to move back to Georgia to be closer to her family. Luckily, last December, a teaching position opened up and Reba and Heather decided to make the move. Reba paid a moving company $2,010 to move their personal belongings, and she and Heather spent two days driving the 1,426 miles to Georgia. Reba rented a home in Georgia. Heather decided to continue living at home with her mom, but she started attending school full-time in January and throughout the rest of the year at a nearby university She was awarded a $3,000 partial tuition scholarship this year, and Reba helped out by paying the remaining $500 tuition cost. If possible, Reba thought it would be best to claim the education credit for these expenses. Reba wasn't sure if she would have enough items to help her benefit from itemizing on her tax return. However, she kept track of several expenses this year that she thought might qualify if she was able to itemize. Reba paid $5,800 in state income taxes and $12,500 in charitable contributions during the year. She also paid the following medical-related expenses for herself and Heather: Insurance premiums $ 7,952 Medical care expenses $ 1,100 Prescription medicine $ 350 Bonprescription medicine New contact lenses for Heather Shortly after the move, Reba got distracted while driving and she ran into a street sign. The accident caused $900 in damage to the car and gave her whiplash. Because the repairs were less than her Insurance deductible, she paid the entire cost of the repairs. Reba wasn't able to work for two months after the accident. Fortunately, she received $2,000 from her disability insurance. Her employer, the Central Georgia School District, paid 60 percent of the premiums on the policy as a nontaxable fringe benefit and Rebo pold the remaining 40 percent portion A few years ago, Reba acquired several Investments with her portion of the divorce settlement. This year she reported the following income from her investments: $2,200 of interest income from corporate bonds and $1,500 interest income from City of Denver municipal bonds. Overall, Reba's stock portfolio appreciated by $12,000, but she did not sell any of her stocks, Heather reported $6,200 of interest income from corporate bonds she received as gifts from her father over the last several years. This was Heather's only source of income for the year $ 100 $ 200 dler. Insurance premiums $ 7,952 Medical care expenses $ 1,100 Prescription medicine $ 350 Nonprescription medicine $ 100 New contact lenses for Healther $ 200 Shortly after the move, Reba got distracted while driving and she ran into a street sign. The accident caused $900 in damage to the car and gave her whiplash. Because the repairs were less than her insurance deductible, she paid the entire cost of the repairs. Reba wasn't able to work for two months after the accident. Fortunately, she received $2,000 from her disability insurance. Her employer, the Central Georgia School District, paid 60 percent of the premiums on the policy as a nontaxable fringe benefit and Reba paid the remaining 40 percent portion. A few years ago, Reba acquired several investments with her portion of the divorce settlement. This year she reported the following income from her investments: $2,200 of interest income from corporate bonds and $1,500 interest income from City of Denver municipal bonds. Overall, Reba's stock portfolio appreciated by $12,000, but she did not sell any of her stocks. Heather reported $6,200 of interest income from corporate bonds she received as gifts from her father over the last several years. This was Heather's only source of income for the year. Reba had $10,000 of federal income taxes withheld by her employer. Heather made $1,000 of estimated tax payments during the year. Reba did not make any estimated payments. Assume Reba received the correct advance payment for her 2021 individual recovery credit
