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Sophia Johnson is 24 years old and single, lives in an apartment, and has no dependents....

Sophia Johnson is 24 years old and single, lives in an apartment, and has no dependents. Last year she earned $41,100 as a sales assistant for Office Furniture Rentals, $3,288 of her wages were withheld for federal income taxes. In addition, she had interest income of $179.

The standard deduction in 2014 was $6,200 for single. The exemption was claimed to be worth $3,950. The appropriate tax rate schedule is shown below:

EXHIBIT 3.3    Sample Tax Rate Schedules
Tax rates levied on personal income vary with the amount of reported taxable income and the taxpayer's filing status.
2014 Tax Rate Schedules
Schedule X-If your filing status is Single
If your taxable
income is:		 The tax is:


Over-
But not
over-		 of the
amount
over-
0 $9,075 _ _ _ _ _10% $0
9,075 36,900 $907.50 + 15% 9,075
36,900 89,350 5,081.25 + 25% 36,900
89,350 186,350 18,193.75 + 28% 89,350
186,350 405,100 45,353.75 + 33% 186,350
405,100 406,750 117,541.25 + 35% 405,100
406,750 _ _ _ _ _ 118,118.75 + 39.6% 406,750

a. Calculate her taxable income.
$  

b. Calculate her tax liability. Round the answer to the nearest cent. Use unrounded values in later calculations. (Hint: Use the tax rate schedules given in Exhibit 3.3 to determine her tax liability.)
$  

c. Calculate her tax refund or tax owed. Enter tax owed, if any, as negative amount. Round the answer to the nearest cent.
$  

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Expert Solution

a) Computation of Taxable Income
Particular Amount in $
sales assistant for Office Furniture Rentals        41,100.00
Interest Income              179.00
Less:- Standard Deduction           6,200.00
Less:- Exemption           3,950.00
Taxable Income        31,129.00
b) Computation of Tax Liability
Particular Amount in $
First $ 9075                        -  
Next $ 9075 to $ 31129 = $ 907.5 + 15%           4,215.60
Total Tax liability           4,215.60
c) Computation of Tax Liability payable / (refund Due)
Particular Amount in $
Total Tax liability           4,215.60
Less:- Federal Income Tax withheld           3,288.00
Tax Owed              927.60

jeff jeffy answered 2 years ago
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