Required information Problem 4-30 (LO 4-1) [The following information applies to
ID: 2339200 • Letter: R
Question
Required information
Problem 4-30 (LO 4-1)
[The following information applies to the questions displayed below.]
Rick, who is single, has been offered a position as a city landscape consultant. The position pays $140,600 in cash wages. Assume Rick has no dependents. Rick deducts the standard deduction instead of itemized deductions. (Use the tax rate schedules.)
Problem 4-30 Part-a
a. What is the amount of Rick’s after-tax compensation (ignore payroll taxes)? (Round your intermediate calculations and final answer to the nearest whole dollar amount. Enter deductions as negative amounts).
Problem 4-30 Parts b-1 to b-2
b-1. Suppose Rick receives a competing job offer of $133,000 in cash compensation and nontaxable (excluded) benefits worth $7,600. What is the amount of Rick’s after-tax compensation for the competing offer? (Round your intermediate calculations and final answer to the nearest whole dollar amount. Enter deductions as negative amounts).
Required information
Problem 4-30 (LO 4-1)
[The following information applies to the questions displayed below.]
Rick, who is single, has been offered a position as a city landscape consultant. The position pays $140,600 in cash wages. Assume Rick has no dependents. Rick deducts the standard deduction instead of itemized deductions. (Use the tax rate schedules.)
Problem 4-30 Part-a
a. What is the amount of Rick’s after-tax compensation (ignore payroll taxes)? (Round your intermediate calculations and final answer to the nearest whole dollar amount. Enter deductions as negative amounts).
Description Amount (1) Gross income (2) For AGI deductions (3) Adjusted gross income (4) Standard deduction (5) Taxable income (6) Income tax liability After-tax compensation 2018 Tax Rate Schedules Individuals Schedule X-Single Schedule Z-Head of Household If tasable income is over: But not over: The tax is: If tasable income is over: But not over: S 13,600 51,800 $ 82,500 $157,500 The tax is: S 9.525 38,700 82,500 157,500 9.525 38,700 82,500 $157,500 $200,000 $500,000 10% of taxable income $952.50 plus 12% of the excess over $9,525 $4,453.50 plus 22% of the excess over $38,700 $14,089.50 plus 24% of the excess over $32,500 $32,089.50 plus 32% of the excess over $157,500 $45,689.50 plus 35% of the excess over $200,000 $150,689.50 plus 37% of the excess over $500,000 13.600 51.800 $ 82,500 $151.500 $200,000 10% of taxable income $1,360 plus 12% of the excess over $13,600 $5.944 plus 22% of the excess over $51,800 $12,698 plus 24% of the excess over $82,500 $30,698 plus 32% of the excess over $157,500 $44,298 plus 35% of the excess over $200,000 $149,298 plus 37% of the excess over $500,000 $500,000 Schedule Y-1-Married Filing Jointly or Qualifying Widow(er) Schedule Y-2-Married Filing Separately If taxable income is over: The tax is: The tax is: But not over: 19,050 77,400 $165,000 $315,000 $400,000 $600,000 If taxable income is over: But not over: S 19,050 77400 $165,000 $315,000 10% of taxable income $1,905 plus 12% of the excess over $19,050 $8,907 plus 22% of the excess over S77.400 $28,179 plus 24% of the excess over $165,000 S64-179 plus 32% of the excess over $315,000 $91,379 plus 35% of the excess over $400,000 $161,379 plus 37% of the excess over $600,000 S 9,525 38,700 82,500 $157.500 $200,000 300,000 9,525 S 38,700 82,500 $157,500 10% of taxable income $952.50 plus 12% of the excess over $9,525 $4,453.50 plus 22% of the excess over $38,700 $14,089.50 plus 24% of the excess over $82,500 $32,089.50 plus 32% of the excess over $157,500 $45,689.50 plus 35% of the excess over $200,000 $80,689.50 plus 37% of the excess over $300,000 $300,000Explanation / Answer
a.
b-1.
As Rick’s after-tax compensation is higher in b-1, with lower salary and more non taxable benefits, he can take the second option.
Description Amount Computation (1) Gross income $140,600 (2) For AGI deductions 0 (3) Adjusted gross income $140,600 1 - 2 (4) Standard deduction $12,000 for single taxpayer (5) Taxable income $128,600 3 - 4 (6) Income tax liability $25,153.50 [($128,600 - $82,500) x 24%] + $14,089.50 After-tax compensation $115,446.50 1 - 7Related Questions
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