Campbell, a single taxpayer, earns $400,000 in taxable income and $2,000 in interest from an investment in state of New York bonds. If Campbell earns an additional $15,000 of taxable income what is her marginal tax rate on this income? What is her marginal rate if, instead, she had $15,000 of additional deduction?

Campbell, a single taxpayer, earns $400,000 in taxable income and $2,000 in interest from an investment in state of New York bonds. If Campbell earns an additional $15,000 of taxable income what is her marginal tax rate on this income? What is her marginal rate if, instead, she had $15,000 of additional deduction?

Individual Income Taxes

43rd Edition

ISBN:9780357109731

Author:Hoffman

Publisher:Hoffman

Chapter3: Tax Formula And Tax Determination : An Overview Of Property Transactions

Section: Chapter Questions

Problem 49P: During 2019, Inez (a single taxpayer) had the following transactions involving capital assets: a. If...

See similar textbooks

Similar questions

Melodie's taxable income is $39,000 and she pays income tax of $4,489. If Melodie's taxable income increases to $41,000, she would pay income taxes of $4,884. What is Melodie's marginal tax rate? 19.75 22.00 18.50 12.00 Some other amount
Sheila, a single taxpayer, is a retired computer executive with a taxable income of 100,000 in the current year. She receives 30,000 per year in tax-exempt municipal bond interest. Adam and Tanya are married and have no children. Adam and Tanyas 100,000 taxable income is comprised solely of wages they earn from their jobs. Calculate and compare the amount of tax Sheila pays with Adam and Tanyas tax. How well does the ability-to-pay concept work in this situation?
Chelsea, who is single, purchases land for investment purposes in 2014 at a cost of 22,000. In 2019, she sells the land for 38,000. Chelseas taxable income without considering the land sale is 100,000. What is the effect of the sale of the land on her taxable income, and what is her tax liability?
Anh is single, has no dependents, and itemizes deductions. In the current year for regular tax purposes, she records 60,000 of income and 105,000 of deductions and losses, primarily from business activities. Included in the losses are 30,000 of AMT preferences. Given this information, what are Anhs regular tax and alternative tax NOL amounts?
Arthur and Cora are married and have 2 dependent children. They have a gross income of 95,000. Their allowable deductions for adjusted gross income total 4,000, and they have total allowable itemized deductions of 26,250. a. What is Arthur and Coras taxable income? b. What is Arthur and Coras income tax? c. If Arthur has 3,900 and Cora has 3,600 withheld from their paychecks, are they entitled to a refund, or do they owe additional taxes?
Martha is a self-employed tax accountant who drives her car to visit clients on a regular basis. She drives her car 4,000 miles for business and 10,000 for commuting and other personal use. Assuming Martha uses the standard mileage method, how much is her auto expense for the year? Where in her tax return should Martha claim this deduction? _________________________________________________ _______________________________________________________________________________ _______________________________________________________________________________
Monica, a self-employed taxpayer, travels from her office in Boston to Lisbon, Portugal, on business. Her absence of 13 days was spent as follows: a. For tax purposes, how many days has Monica spent on business? b. What difference does it make? c. Could Monica have spent more time than she did vacationing on the trip without loss of existing tax benefits? Explain.
During 2019, Inez (a single taxpayer) had the following transactions involving capital assets: a. If Inez has taxable income of 158,000, how much income tax results? b. If Inez has taxable income of 35,000, how much income tax results?
During the 2019 tax year, Brian, a single taxpayer, received $ 7,400 in Social Security benefits. His adjusted gross income for the year was $14,500 (not including the Social Security benefits) and he received $ 30,000 in tax-exempt interest income and has no for-AGI deductions, Calculate the amount of the Social Security benefits that Brian must include in his gross income for 2019. SIMPIFIED TAXABLE SOCIAL SECURITY WORKSHEET (FOR MOST PEOPLE) 1. Enter the total amount of Social Security income. 2. Enter one-half of line 1 3. Enter the total of taxable income items on Form 1040 except Social Security income. 4. Enter the amount of tax-exempt interest income. 5. Add lines 2,3, and 4 6. Enter all adjustments for AGl except for student loan interest, the domestic production activities deduction, and the tuition and fees deduction. 7. Subtract line 6 from line 5 . If zero or less, stop here, none of the Social Security benefits are taxable. 8. Enter $ 25,0001 $ 32,000 if married filing jointly; 0 if married filing separately and living with spouse at any time during the year) 9. Subtract line 8 from line 7 . If zero or less, enter -0 - Note: If line 9 is zero or less, stop here; none of your benefits are faxable. Otherwise, go on to line 10 10. Enter $ 9,0001 $12,000 if married filing jointly; 0 if married filing separately and living with spouse at any time during the year) 11. Subtract line 10 from line 9. If zero or less, enter -0 -. 12. Enter the smaller of line 9 or line 10 . 13. Enter one-half of line 12 14. Enter the smaller of line 2 or line 13 . 15. Multiply line 11 by 85 (. 85 ). If line 11 is zero, enter -0 -. 16. Add lines 14 and 15 17. Multiply line 1 by 85(.85) 18. Taxable benefits. Enter the smaller of line 16 or line 17 . 1.____________ 2.____________ 3.____________ 4.____________ 5.____________ 6.____________ 7.____________ 8.____________ 9.____________ 10.____________ 11.____________ 12.____________ 13.____________ 14.____________ 15.____________ 16.____________ 17.____________ 18.____________
Arlen is required by his 2019 divorce agreement to pay alimony of $2,000 a month and child support of $ 2,000 a month to his ex-wife Jane. What is the tax treatment of these two payments for Arlen? What is the tax treatment of these two payments for Jane? Arlen_______________________________________________________________________________________________________________________________________________ Jane_______________________________________________________________________________________________________________________________________________
In each of the following problems, identify the tax issue(s) posed by the facts presented. Determine the possible tax consequences of each issue that you identify. Thans grandmother dies and leaves him jewelry worth 40,000. In addition, he is the beneficiary of a 100,000 life insurance policy that his grandmother had bought before she retired.
How much taxable income should each of the following taxpayers report? a. Kimo builds custom surfboards. During the current year, his total revenues are 90,000, and he incurs 30,000 in expenses. Included in the 30,000 is a 10,000 payment to Kimos five-year-old son for services as an assistant. b. Manu gives hula lessons at a local bar. During the current year, she receives 9,000 in salary and 8,000 in tips. In addition, she engages in illegal behavior, for which she receives 10,000.