Do the Math 45 Use Tax Rate Schedule Carson Wentz of Philade

Do the Math 4-5
Use Tax Rate Schedule

Carson Wentz, of Philadelphia, determined the following tax information: salary, $159,000; interest earned, $2,000; qualified retirement plan contribution, $5,000; personal exemption, $4,050; itemized deductions, $10,000. Filing single, calculate Carson\'s taxable income and tax liability. (Hint: Use Table 4-2.) Round your answer for tax liability to the nearest cent.

Solution

taxable income = salary + interest earned - qualified retirement plan contribution-personal exemption - itemized deduction = 159000+2000-5000-4050-10000 = 141950

carson wentz falls in 28% tax bracket and basic tax for the income upto 91150 is 18558.75

Tax liability = 18558.75+(28%*(141950-91150)) = 32782.75