ACCT M50 PRINCIPLES OF INCOME TAXATION PRACTICE EXAM | FREE SOLVED ANSWERS
What is the amount of the tax liability for a head of household person having taxable income of $122,500? Use the appropriate Tax Tables and Tax Rate Schedules
What is the amount of the tax liability for a head of household person having taxable income of $122,500? Use the appropriate Tax Tables and Tax Rate Schedules
Note: All answers should be rounded to the nearest dollar.
Multiple Choice
- a. $20,800
- b. $18,184
- c. $23,236
- d. $20,749
Correct Answer: (d) $20,749
To calculate the tax liability for a Head of Household taxpayer with a taxable income of $122,500, we need to apply the appropriate tax bracket from the given Tax Rate Schedule.
- Identify the correct bracket:
Since $122,500 falls between $100,500 and $191,950, the applicable formula is: Tax=15,469+24%×(Taxable Income−100,500) - Calculate the excess income:
The excess over $100,500 is: 122,500−100,500=22,000 - Apply the marginal rate:
The tax on the excess portion is: 22,000×0.24=5,280 - Add the base tax:
Finally, we add the base amount from the schedule to this result: 15,469+5,280=20,749
Therefore, the total tax liability for a head of household individual with $122,500 in taxable income is $20,749.
ACCT M50 PRINCIPLES OF INCOME TAXATION PRACTICE EXAM FREE SOLVED ANSWERS