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Ch 02: Foundation Problems - Financial Statements, Cash Flow, and Taxes 2018 Individual Tax Rates Single Individuals You Pay This Plus This Percentage Average Tax If Your Taxable Amount on the on the Excess over the Rate at Income Is Base of the Bracket Base (Marginal Rate) Top of Bracket Up to $9,525 10.0% 10.0% $9,525 - $38,700 952.50 12.0 11.5 $38,700 - $82,500 4,453.50 22.0 $82,500 - $157,500 14,089.50 24.0 20.4 $157,500 - $200,000 32,089.50 32.0 22.8 $200,000 - $500,000 45,689.50 35.0 30.1 Over $500,000 150,689.50 37.0 $0 17.1 37.0 Standard deduction for individual: $12,000 Married couples Filing Joint Returns You Pay This P lus This Percentage Amount on the on the Excess over the Base of the Bracket Base (Marginal Rate) 10.0% 1,905.00 12.0 8,907.00 22.0 28,179.00 64,179.00 32.0 91,379.00 35.0 161,379.00 37.0 Average Tax Rate at Top of Bracket 10.0% 11.5 If Your Taxable Income Is Up to $19,050 $19,050 - $77,400 $77,400 - $165,000 $165,000 - $315,000 $315,000 - $400,000 $400,000 - $600,000 Over $600,000 17.1 24.0 22.8 26.9 37.0 Standard deduction for married couples filing jointly: $24,000 Quantitative Problem: Jenna is a single taxpayer. During 2018, she earned wages of $132,000. She doesn't itemize deductions, so she will take the standard deduction to calculate 2018 taxable income. In addition, during the year she sold common stock that she had owned for five years for a net profit of $4,300. How much does Jenna owe to the IRS for taxes? Do not round intermediate calculations. Round your answer to the nearest cent. Corporate Corporations earn most of their income from operations; however, they may also receive interest and dividend income. -Select- income is taxed as ordinary income; however, -Select- income is taxed more favorably. 50% of -Select- received is excluded from taxable income, while the remaining 50% is taxed at the ordinary tax rate. For businesses, -Select- payments are regarded as an expense so they are tax deductible; however, -Select- y payments are not tax deductible. Consequently, our tax system encourages -Selectfinancing over -Select- financing. Depreciation expense is tax deductible, so the larger the depreciation, the -Select the taxable income, the -Select the taxes, and the -Select the firm's operating cash flow. Quantitative Problem: Andrews Corporation has income from operations of $243,000. In addition, it received interest income of $24,300 and received dividend income of $29,600 from another corporation. Finally, it paid $10,400 of interest income to its bondholders and paid $42,600 of dividends to its common stockholders. The firm's federal tax rate is 21%. What is the firm's federal income tax? Do not round intermediate calculations. Round your answer to the nearest cent
