Required informatio [The following information applies to the questions displaye

Question

Required informatio [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 $125,000 in cash wages. Assume Rick files single and is entitled to one personal exemption. Rick deducts the standard deduction instead of itemized deductions. (use the tax rate schedules.) a. What is the amount of Rick's after-tax compensation (ignore payroll taxes)? (Do not round intermediate calculations. Round income tax liability and After-tax compensation to 2 decimal places. Enter deductions as negative amounts) Description Amount (1) Gross income (2) For AGI deductions (3) Adjusted gross income (4) Standard deduction (5) Personal and dependency exemptions (6) Taxable income (7) Income tax liability $ 125,000 $ 125,000 $125,000 After-tax compensation

Explanation / Answer

As per US tax for 2017 the standard deduction available for Ricks as he files single return is $6350.

Adjusted gross income $125000

Less : Standard deduction for single return filers $6350

Taxable Income $118650

Income tax payable as per slab for individuals

($18713.75 + 28% of amount over $ 91900 = $18713.75 + 28% of $26750 $26203.75

After tax compensation ( 118650 - $26203.75 ) $92446.25   

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