Answer:
To determine the tax rate Tasha will pay on her investment income, we need to consider both her ordinary taxable income and her capital gains income separately because they are taxed differently.
First, let's calculate the tax on her ordinary taxable income:
Ordinary Taxable Income: $90,000
The income brackets for single taxpayers are as follows:
10% for income up to $9,525
12% for income between $9,526 and $38,700
22% for income between $38,701 and $82,500
24% for income between $82,501 and $157,500
Tasha's income falls into the 24% tax bracket, as her income is $90,000, which is greater than $82,500. Therefore, her tax on ordinary income is calculated as follows:
Tax on Ordinary Income = (Income - Previous Bracket Limit) * Tax Rate + Previous Bracket Tax
Tax on Ordinary Income = ($90,000 - $82,501) * 0.24 + (0.12 * ($38,700 - $9,526)) + (0.10 * ($9,525))
Now, let's calculate the tax on her capital gains income:
Capital Gains Income: $12,000
The income brackets for qualified dividends and long-term capital gains tax for single taxpayers are as follows:
0% for income up to $38,600
15% for income between $38,601 and $425,800
Tasha's capital gains income of $12,000 falls into the 0% tax bracket, as it is less than $38,600. Therefore, her tax on capital gains income is 0%.
Now, add the tax on ordinary income and the tax on capital gains income to find the total tax:
Total Tax = Tax on Ordinary Income + Tax on Capital Gains Income
Total Tax = [($90,000 - $82,501) * 0.24 + (0.12 * ($38,700 - $9,526)) + (0.10 * $9,525)] + 0
Total Tax = [($7,499 * 0.24 + $29,174 + $952.50] + 0
Total Tax = [$1,799.76 + $29,174 + $952.50] + 0
Total Tax = $31,926.26
So, the total tax Tasha will pay on her investment income is $31,926.26.