Tax Rates. Lillian, a single taxpayer, had the following income and deductions for the tax year 2018:
Question:
Tax Rates. Lillian, a single taxpayer, had the following income and deductions for the tax year 2018:
INCOME:
Salary ....................................................$ 90,000
Business Income ..................................24,000
Interest income from taxable bonds ..8,000
Tax-exempt bond interest ...................4,100
TOTAL INCOME ...................................126,100
DEDUCTIONS:
Business expenses ...........................$ 9,000
Itemized deductions ..........................15,000
TOTAL DEDUCTIONS ........................24,000
a). Compute Lillian’s taxable income and federal tax liability for 2018 (round to dollars).
b). Compute Lillian’s marginal, average, and effective tax rates.
c). For tax planning purposes, which of the three rates in Part b is the most important?
Expert Answer:
Federal Taxation 2016 Comprehensive
ISBN: 9780134104379
29th edition
Authors: Thomas R. Pope, Timothy J. Rupert, Kenneth E. Anderson
