Question
In: Civil Engineering
In 2019, a single engineer had a gross income of $68,000 and itemized deductions of $13,400....
In 2019, a single engineer had a gross income of $68,000 and itemized deductions of $13,400. Determine the amount of minimum federal tax he must pay.
Solutions
Expert Solution
Ans : STEP 1 : Calculate Total Taxable income , which is done by subtracting deductions and exemptions from the gross income .
Income = $68,000
Itemized Deduction = $13,400
Personal Exemption = $3900
Taxable Income = Income - (Deductions + Exemptions)
= $68,000 - ($13,400 + $3900)
Taxable Income = $50,700
STEP 2 : CALCULATE THE FEDERAL TAX :
According the current federal tax bracks , so the total taxable income should be divide in all the brackest and would incure taxes from all the brackets individually .
CURRENT FEDERAL TAX BRACKETS :
- $0 - $8925 = 10%
- $8925 - $36,250 = 15%
- $36,250 - $87,850 = 25%
From the 1st bracket : 10% of $8925 = $892.5
From the 2nd bracket : 15% of ($36,250 - $8925) = $4098.75
From the 3rd bracket : 25% of ($50,700 - $36,250) = $3612.5
Minimum Amount Of Federal Tax : $892.5 + $4098.75 + $3612.5 = $8603.75
$8603.75 is the minimum amount of Federal Tax that he/she has to pay .
FEDERAL INSURANCE CONTRIBUTION ACT (FICA), that you have to pay in social security and medicare from your gross income that is given to us is $68,000 .
- For SOCIAL SECURITY : 6.29%
- For MEDICARE : 1.45%
FICA = $68,000 x ( 0.0629 + 0.0145 )
FICA = $5263.2
Maximum Amount of Federal Tax = Minimum Amount of Federal Tax + FICA
= $8603.75 + $5263.2
Maximum Amount of Federal Tax = $13,866.95
SUMMARY
I have calculated both maximum and minimum Federal Tax :
MINIMUM FEDERAL TAX = $8603.75
MAXIMUM FEDERAL TAX = $13,866.95
HOPE SO YOU WOULD APPRECIATE MY EFFORTS , PLEASE PROVIDE POSITIVE RATINGS . THANKYOU :)
Ally Wells answered 1 year agoRelated Solutions
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