Question

Jim is a Mechanical Engineer. He earns $116000/year after allowable deductions.

a. What will he owe the IRS in 2018?  

Jim is offered a new position that will double his taxable income for 2018.

b. If he accepts the new position how much more will he owe the IRS in 2018?

Jim's boss Ron will have $601000/year taxable income in 2018.

c. What will he owe the IRS?

Answer 1

a. What will he owe the IRS in 2018?

1
Slab	Tax Rate	Basis	Tax
9,525.00	10%	9,525.00	952.50
38,700.00	12%	29,175.00	3,501.00
82,500.00	22%	43,800.00	9,636.00
116,000.00	24%	33,500.00	8,040.00
			22,129.50

b. If he accepts the new position how much more will he owe the IRS in 2018?

Revised Taxable Income	(116000+12000)*2	256,000.00
Taxable Income	Deduction	Income After Deduction
256,000.00	12000.00	244,000.00
Slab	Tax Rate	Basis	Tax
9,525.00	10%	9,525.00	952.50
38,700.00	12%	29,175.00	3,501.00
82,500.00	22%	43,800.00	9,636.00
157,500.00	24%	75,000.00	18,000.00
200,000.00	32%	42,500.00	13,600.00
244,000.00	35%	44,000.00	15,400.00
			61,089.50

c. What will he owe the IRS?

Taxable Income	Deduction	Income After Deduction
601,000.00	12000.00	589,000.00
Slab	Tax Rate	Basis	Tax
9,525.00	10%	9,525.00	952.50
38,700.00	12%	29,175.00	3,501.00
82,500.00	22%	43,800.00	9,636.00
157,500.00	24%	75,000.00	18,000.00
200,000.00	32%	42,500.00	13,600.00
500,000.00	35%	300,000.00	105,000.00
589,000.00	37%	89,000.00	32,930.00
			183,619.50