Mary Jarvis is a single individual who is working on filing her tax return for the...

Mary Jarvis is a single individual who is working on filing her tax return for the previous year. She has assembled the following relevant information:

She received $99,000 in salary.
She received $13,500 of dividend income.
She received $4,200 of interest income on Home Depot bonds.
She received $23,000 from the sale of Disney stock that was purchased 2 years prior to the sale at a cost of $6,700.
She received $14,500 from the sale of Google stock that was purchased 6 months prior to the sale at a cost of $4,700.
Mary receives one exemption ($4,000), and she has allowable itemized deductions of $7,500. These amounts will be deducted from her gross income to determine her taxable income.

What is Mary's federal tax liability? Round your answer to the nearest cent. Do not round intermediate calculations.

What is her average tax rate? Round your answer to 2 decimal places.

Personal taxes

Salary	$99,000.00
Dividend Income	$13,500.00
Interest Income	$4,200.00
LT Stock Sale	$23,000.00
LT Stock Cost	$6,700.00
ST Stock Sale	$14,500.00
ST Stock Cost	$4,700.00
Personal Exemption	$4,000.00
Itemized Deductions	$7,500.00
Apllicable Tax Rate on Dividends & LT Capital Gains	15.00%

a. Calculation of Federal Tax Liability
Calculation of Taxable Income:
Salary	$99,000.00
Interest Income	$4,200.00
ST Capital Gains	$9,800.00
Income before Exemption and Deductions	$113,000.00
Personal Exemption	$4,000.00
Itemized Deductions	$7,500.00
Taxable Income before Dividends & LT Capital Gains

Taxes on Taxable Income Before Dividends & LT Capital Gains:
Tax Liability on Base of Bracket
Tax Liability on Excess over Base
Tax on Taxable Income before Dividends & LT Capital Gains

Taxes on Dividends & LT Capital Gains:
Dividend Income
LT Capital Gains Income
Total Dividend & LT Capital Gains Income
Tax on Dividends & LT Capital Gains Income

Total Federal Tax Liability

b. Calculation of Marginal Tax Rate
Marginal Tax Rate

c. Calculation of Average Tax Rate
Average Tax Rate

Taxable Income	Amount Paid on Base	Percentage on Excess over Base
$0.00	$0.00	10.00%
$9,225.00	$922.50	15.00%
$37,450.00	$5,156.25	25.00%
$90,750.00	$18,481.25	28.00%

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Expert Solution

ekkarill92 answered 1 year ago

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