Question

Jamie is single. In 2019, she reported $100,000 of taxable income, including a long-term capital gain of $5,000. What is her gross tax liability, rounded to the nearest whole dollar amount

Answer 1

Answer:

$17,724.50

Explanation:

The computation of the gross tax liability is shown below:

The tax schedule for 2019 year is shown below:

Tax slabs                            tax rate                          taxable amount

$0 - $9,700                       10%                                 $970

$9,700 - $39,475              12%                                 $3,573

$39,475 - $84,200            22%                                $9,839.30

$84,200 - $95,000           24%                                 $2,592

Total                                                                            $16,974.50

The capital gain tax rate is 15% (assume)

So, the capital gain is

= $5,000 × 15% = $750

So, the gross liability is

= $16,974.50 + $750

= $17,724.50