The following information applies to the questions displayed below.] Lacy is a s
ID: 2577388 • Letter: T
Question
The following information applies to the questions displayed below.] Lacy is a single taxpayer. In 2016, her taxable income is $41,200. What is her tax liability in each of the following alternative situations? Use Tax Rate Schedule for reference. (Do not round intermediate calculations. Round your answers to 2 decimal places.)
a. All of her income is salary from her employer. (tax liability?)
b. Her $41,200 of taxable income includes $1,700 of qualified dividends. (tax liability?)
c. Her $41,200 of taxable income includes $8,100 of qualified dividends. (tax liability ?)
Explanation / Answer
Lacy is a single tax payer
Income
$ 41,200.00
1. All her income is salary
10%
0 to $ 9275
15%
$ 9276 to $ 37650
25%
$ 37650 to $ 41200
Federal Tax
$ 6,071.10
2. Income Includes $1,700 of qualified dividend
Income to be taxed in brackets
$ 39,500.00
Beause the income falls above the last two brackets the dividend will be taxed @ 15%
10%
0 to $ 9275
15%
$ 9276 to $ 37650
25%
$ 37650 to $ 39500
15%
$ 1,700
Federal Tax
$ 5,901.10
3. Income Includes $8,100 of qualified dividend
Income to be taxed in brackets
$ 33,100.00
Beause the income falls in the last two brackets the dividend will be taxed @ 0% i.e. it is exempt
10%
0 to $ 9275
15%
$ 9276 to $ 33100
Federal Tax
$ 4,501.10
Lacy is a single tax payer
Income
$ 41,200.00
1. All her income is salary
10%
0 to $ 9275
15%
$ 9276 to $ 37650
25%
$ 37650 to $ 41200
Federal Tax
$ 6,071.10
2. Income Includes $1,700 of qualified dividend
Income to be taxed in brackets
$ 39,500.00
Beause the income falls above the last two brackets the dividend will be taxed @ 15%
10%
0 to $ 9275
15%
$ 9276 to $ 37650
25%
$ 37650 to $ 39500
15%
$ 1,700
Federal Tax
$ 5,901.10
3. Income Includes $8,100 of qualified dividend
Income to be taxed in brackets
$ 33,100.00
Beause the income falls in the last two brackets the dividend will be taxed @ 0% i.e. it is exempt
10%
0 to $ 9275
15%
$ 9276 to $ 33100
Federal Tax
$ 4,501.10
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