Jeremy earned $100,000 in salary and $6,000 in interest income during the year. Jeremy’s employer withheld $10,000 of federal income taxes from Jeremy’s paychecks during the year. Jeremy has one qualifying dependent child (age 14) who lives with him. Jeremy qualifies to file as head of household and has $23,000 in itemized deductions, including $2,000 of charitable contributions to his church. (Use the tax rate schedules.) b. Assume that in addition to the original facts, Jeremy has a long-term capital gain of $4,000. What is Jeremy’s tax refund or tax due including the tax on the capital gain? 2021 Tax Rate SchedulesIndividualsSchedule X-SingleIf taxable income is over:But not over:$ 9,950$ 40,525$ 86,375$ 164,925$ 209,425$ 523,600The tax is:10% of taxable income$ 9,950$995 plus 12% of the excess over $9,950$ 40,525$ 86,375$ 164,925$ 209,425$ 523,600$4,664 plus 22% of the excess over $40,525$14,751 plus 24% of the excess over $86,375$33,603 plus 32% of the excess over $164,925$47,843 plus 35% of the excess over $209,425$157,804.25 plus 37% of the excess over $523,600 b. Assume that in addition to the original facts, Jeremy has a long-term capital gain of $4,000. What is Jeremy's tax refund or tax dueincluding the tax on the capital gain?DescriptionAmount(1) Gross income$110,000(2) For AGI deductions(3) Adjusted gross income$110,000(4) Standard deduction(5) Itemized deductions(6) Greater of standard deduction or itemized deductions(7) Taxable income2$110,000(8) Income tax liability(9) Child tax credit3,000(10) Tax withholding10,000Tax due

Answered: Assume that in addition to the original…

SWFT Essntl Tax Individ/Bus Entities 2020

23rd Edition

ISBN:9780357391266

Author:Nellen

Publisher:Nellen

Chapter16: Multijurisdictional Taxation

Section: Chapter Questions

Problem 1BCRQ

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Jeremy earned $100,000 in salary and $6,000 in interest income during the year. Jeremy’s employer withheld $10,000 of federal income taxes from Jeremy’s paychecks during the year. Jeremy has one qualifying dependent child (age 14) who lives with him. Jeremy qualifies to file as head of household and has $23,000 in itemized deductions, including $2,000 of charitable contributions to his church. (Use the tax rate schedules.)

b. Assume that in addition to the original facts, Jeremy has a long-term capital gain of $4,000. What is Jeremy’s tax refund or tax due including the tax on the capital gain?

2021 Tax Rate Schedules
Individuals
Schedule X-Single
If taxable income is over:But not over:
$ 9,950
$ 40,525
$ 86,375
$ 164,925
$ 209,425
$ 523,600
The tax is:
10% of taxable income
$ 9,950
$995 plus 12% of the excess over $9,950
$ 40,525
$ 86,375
$ 164,925
$ 209,425
$ 523,600
$4,664 plus 22% of the excess over $40,525
$14,751 plus 24% of the excess over $86,375
$33,603 plus 32% of the excess over $164,925
$47,843 plus 35% of the excess over $209,425
$157,804.25 plus 37% of the excess over $523,600

Expert Solution

Step 1

Taxable income refers to the amount to which tax is imposed. It is arrived at after allowing certain deductions as per relevant law. Tax due are calculated using slab rates. When income is high, higher slab rates are applicable.

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