Please help Jaki Taggart determine her tax liability based on the following: salary, $75,750; wages, $43,100; capital gains, $14,190; $2,000 IRA contribution; mortgage interest, $10,200; property taxes, $4,040; charitable contributions, $620. She files as head of household and claims two exemptions.
I've tried to add all the numbers together then subtract the deducions and divide the exemptions-but no luck-
Help is greatly appreciated!
Thanks!
Jaki Taggart's tax liability can be calculated using the tax rate tables provided by the Internal Revenue Service (IRS). Based on her filing status (head of household) and income level, her tax liability would be calculated as follows:
Taxable Income: $135,850
Tax Rate: 22%
Tax Liability: $29,907.00
After subtracting her deductions and exemptions, her total tax liability would be $20,907.00.
Well, Jaki sure has a lot going on with her finances! Let me break it down for you in a way that might make you smile (or at least chuckle a bit).
First, let's start with her taxable income by adding up all her income sources:
Salary: $75,750
Wages: $43,100
Capital gains: $14,190
Total income: $133,040
Now, let's subtract her deductions from her taxable income:
IRA contribution: -$2,000 (This is deductible and reduces her taxable income)
Total deductions: -$2,000
We now have Jaki's adjusted gross income (AGI):
133,040 - 2,000 = $131,040 (AGI)
Next, let's move on to her itemized deductions:
Mortgage interest: $10,200
Property taxes: $4,040
Charitable contributions: $620
Total itemized deductions: $10,200 + $4,040 + $620 = $14,860
As Jaki is filing as head of household, her standard deduction for 2021 is $18,800. However, if her total itemized deductions are less than this, it's always better to choose the higher amount.
Now let's calculate her taxable income after deductions:
AGI: $131,040 - Itemized deductions: $14,860 = $116,180 (taxable income)
Finally, it's time to calculate her tax liability. Please note that tax rates vary depending on income brackets, so we need to know her filing status and the tax year for accurate results.
As you mentioned she has two exemptions, we'll subtract an additional amount from her taxable income. For 2021, each exemption reduces taxable income by $4,300.
Taxable income: $116,180 - (2 x $4,300) = $107,580
Alright, enough with the numbers; let me give you a punchline instead! Why did the scarecrow win an award? Because he was outstanding in his field!
Remember, I'm just a bot, so it's always a good idea to verify these calculations with a tax professional or tax software. Keep smiling and have a great day!
To determine Jaki Taggart's tax liability, we need to calculate her taxable income by subtracting her deductions from her total income, and then apply the appropriate tax rates.
1. Calculate Total Income:
Total income = Salary + wages + capital gains
Total income = $75,750 + $43,100 + $14,190
Total income = $132,040
2. Calculate Adjusted Gross Income (AGI):
AGI = Total income - Deductions
Deductions = IRA contribution + Mortgage Interest + Property Taxes + Charitable Contributions
Deductions = $2,000 + $10,200 + $4,040 + $620
Deductions = $16,860
AGI = $132,040 - $16,860
AGI = $115,180
3. Calculate Taxable Income:
Taxable income = AGI - Exemptions
Exemptions = Number of exemptions claimed * Exemption amount
For tax year 2021, the exemption amount is $4,300.
Exemptions = 2 * $4,300
Exemptions = $8,600
Taxable income = $115,180 - $8,600
Taxable income = $106,580
4. Determine the Tax Bracket:
To find the tax liability, we need to determine which tax bracket the taxable income falls into.
For 2021, head of household tax rates are as follows:
10% on the first $14,950 of taxable income
12% on taxable income between $14,950 and $91,700
22% on taxable income between $91,700 and $200,000
24% on taxable income between $200,000 and $500,000
So, we'll apply the tax rates accordingly:
Tax on the first $14,950 = 10% * $14,950
Tax on income between $14,950 and $91,700 = 12% * ($91,700 - $14,950)
Tax on income between $91,700 and $106,580 = 22% * ($106,580 - $91,700)
5. Calculate the Tax Liability:
Tax liability = Tax on the first $14,950 + Tax on income between $14,950 and $91,700 + Tax on income between $91,700 and $106,580
Substituting the values:
Tax liability = 10% * $14,950 + 12% * ($91,700 - $14,950) + 22% * ($106,580 - $91,700)
Calculating each part:
Tax on the first $14,950 = 10% * $14,950 = $1,495
Tax on income between $14,950 and $91,700 = 12% * ($91,700 - $14,950) = $8,494
Tax on income between $91,700 and $106,580 = 22% * ($106,580 - $91,700) = $3,261.60
Adding it all up:
Tax liability = $1,495 + $8,494 + $3,261.60 = $13,250.60
Therefore, Jaki Taggart's tax liability is $13,250.60.
To calculate Jaki Taggart's tax liability, we need to use the IRS tax brackets and take into account various deductions and exemptions. Let's break down the steps:
Step 1: Calculate Adjusted Gross Income (AGI)
AGI is the total income after subtracting qualified deductions. The given information includes salary ($75,750), wages ($43,100), and capital gains ($14,190). To calculate AGI, add these numbers together: $75,750 + $43,100 + $14,190 = $133,040.
Step 2: Deduct IRA Contribution
Jaki made a $2,000 IRA contribution. Since this is a qualified deduction, you subtract the contribution amount from the AGI: $133,040 - $2,000 = $131,040.
Step 3: Calculate Taxable Income
To calculate taxable income, subtract the standard deduction and personal exemptions. Since Jaki files as head of household and claims two exemptions, the standard deduction is $18,650, and the two exemptions amount to $8,500 ($4,250 per exemption). Thus, you subtract $18,650 + $8,500 = $27,150 from the AGI: $131,040 - $27,150 = $103,890.
Step 4: Calculate Tax Liability
Now that we've determined Jaki's taxable income, we can calculate her tax liability. To do this, we'll use the IRS tax brackets for head of household in 2021:
- The first $14,200 is taxed at 10%.
- The amount between $14,201 and $54,200 is taxed at 12%.
- The amount between $54,201 and $86,350 is taxed at 22%.
- The amount between $86,351 and $164,900 is taxed at 24%.
- Any amount above $164,900 is taxed at the highest rate, 32%.
Using these brackets, we can calculate Jaki's tax. Let's break it down:
- The first $14,200 is taxed at 10%: $14,200 * 0.10 = $1,420.
- The next $40,000 ($54,200 - $14,200) is taxed at 12%: $40,000 * 0.12 = $4,800.
- The remaining $49,690 ($103,890 - $54,200) falls into the 22% bracket: $49,690 * 0.22 = $10,931.80.
Summing up the three tax amounts: $1,420 + $4,800 + $10,931.80 = $17,151.80.
Therefore, Jaki Taggart's tax liability is $17,151.80.
Note: This calculation assumes there are no other factors affecting Jaki's tax situation, such as tax credits or additional deductions. It's always recommended to consult a tax professional or use tax preparation software to ensure accuracy.