Jamie is single. In 2019, she reported $100,000 of taxable income, including a long-term capital gain of $5,000. What is her gross tax liability, rounded to the nearest whole dollar amount? (Use the Tax rate schedules.)

Respuesta :

Answer:

$17,724

Explanation:

Jamie is single with taxable income of $100,000 that includes $5,000 long term capital gain. So, $95,000 will be taxed under normal tax rates and $5,000 as per long term capital gain tax rate.

As per 2019 tax schedule, Jamie falls under 24% tax bracket under filing for single status. Calculation of ordinary tax:

Tax liability on ordinary income = 14,382 + 0.24 (95,000 - 84,200)

                  = 14,382 + 2,592

                  = $16,974

Since, her total income is more than $39,376 but less than $434,551, long term capital gain tax applicable in 2019 is 15%

Tax on long term capital gain = 5,000 × 0.15

                                               = $750

Jamie's total tax liability is 16,974 + 750 = $17,724