Sally is a single and has the following situation for the year: Sally’s income of $120,000; dividend income of $2,000; interest income of $3,000; short-term capital gain of $7800 and long term capital gain of 10,000. She also paid $8,800 on interest charges on her credit card. Her other total exemptions and itemized deductions is 18,000; these amounts will be deducted from her gross income to determine her taxable income. If she is files as a single individual, what is Sally's tax liability for the year, i.e. how much in taxes she will pay for the year? Use the individual tax rate provided below.

Single Individual Tax table

a. $31,755

b. 30,255

c. 28,755

d. 27,615

e. None of the above

Transcribed Image Text:

Tax on Base Percentage on of Bracket Taxable Income Excess above Base Up to $6,000 $6,000-$27,950 $27,950-$67,700 $67,700-$141,250 $141,250-$307,050 Over $307,050 $0.00 600.00 10.0% 15.0 3,892.50 14,625.00 36,690.00 94,720.00 27.0 30.0 35.0 38.6 Tax on Base Percentage on of Bracket Taxable Income Excess above Base Up to $6,000 $6,000-$27,950 $27,950-$67,700 $67,700-$141,250 $141,250-$307,050 Over $307,050 $0.00 600.00 10.0% 15.0 3,892.50 14,625.00 36,690.00 94,720.00 27.0 30.0 35.0 38.6