Final answer:
Jamie's gross tax liability for the year 2021, including a long-term capital gain, is C.) $17,725.
Step-by-step explanation:
Let's break down the calculation of Jamie's gross tax liability.
In 2021, the tax rates for single filers were structured with different brackets. Since Jamie has a taxable income of $100,000, we can determine her tax liability using the following steps:
1. Calculate the tax on ordinary income:
- The first $9,950 is taxed at 10%
- The next $30,575 ($40,525 - $9,950) is taxed at 12%
- The next $45,050 ($85,575 - $40,525) is taxed at 22%
- The remaining $9,425 ($95,000 - $85,575) is taxed at 24%
Let's calculate the tax on ordinary income:
= (9,950 x 0.10) + (30,575 x 0.12) + (45,050 x 0.22) + (9,425 x 0.24)
= 995 + 3,669 + 9,911 + 2,262
= 16,837
2. Calculate the tax on the long-term capital gain:
Long-term capital gains are taxed at a different rate. In this case, the $5,000 long-term capital gain is taxed at 15%.
= 5,000 x 0.15
= 750
3. Add the taxes on ordinary income and long-term capital gain:
= 16,837 + 750
= 17,587
Now, rounding to the nearest whole dollar amount, the gross tax liability is $17,587. However, this doesn't match any of the provided answer choices exactly. But the closest option is $17,725.
Therefore, the correct answer is C.) $17,725.