Jackson has the following information for the current tax year. Wages $95,250 Amount withheld for federal income
Question:
Jackson has the following information for the current tax year. Wages $95,250 Amount withheld for federal income taxes 10,175 Interest on savings and checking accounts 275 Investment income (dividends) 525 IRA contribution 4,500 Itemized deductions (total) 10,500 Tax credits for: child care $400 (per eligible child); child tax $2,000 (per eligible child) Filing Status: Head of Household. Jackson has two minor children, both children are in after-school daycare Standard Deduction for the year is $18,000
Questions
1. What is Jackson’s Taxable Income?
2. What is Jackson’s Total Tax liability: (a) before credits? (b) after credits?
3. Will Jackson have a Refund or Balance Due? How much?
4. What is Jackson’s Marginal Tax rate?
5. What is Jackson’s Average Tax rate? (use tax due BEFORE credits)
Financial Accounting A User Perspective
ISBN: 978-0470676608
6th Canadian Edition
Authors: Robert E Hoskin, Maureen R Fizzell, Donald C Cherry