Question

Monica is an unmarried college student with no dependents. Last year, she made $14,000 working part-time as a medical assistant. Each year she filed taxes as Single, takes a standard deduction of $5700, and claims herself as the only exemption for $3650. Based on this information, what tax bracket does Monica fall into?

a. Low-income bracket

b. Middle-income bracket

c. High-income bracket

d. Cannot be determined

Answer 1

Monica falls into the lowest tax bracket (10% in this case), she would be considered as part of the low-income bracket.

Step-by-step explanation:

In determining Monica's tax bracket, we need to consider her taxable income after accounting for the standard deduction and personal exemption that apply to the tax year in question. Monica's standard deduction is $5,700, and the personal exemption is $3,650. Deducting these amounts from her annual income of $14,000, we get $14,000 - $5,700 - $3,650 = $4,650, which is her taxable income. Based on the given information, Monica falls into the low-income bracket. Let's calculate her taxable income:

• Income: $14,000
• Standard Deduction: $5,700
• Personal Exemption: $3,650

Taxable Income = Income - (Standard Deduction + Personal Exemption) = $14,000 - ($5,700 + $3,650) = $4,650.

Since Monica falls into the lowest tax bracket (10% in this case), she would be considered as part of the low-income bracket.