Final answer:
Determining Jeremy's tax refund or tax due, including the tax on a $4,000 long-term capital gain, requires knowing his total adjusted gross income and applying the appropriate tax rates. Long-term capital gains are taxed at preferential rates, and whether Jeremy receives a refund or owes tax depends on his total tax liability versus his tax payments.
Step-by-step explanation:
To determine Jeremy's tax refund or tax due, including the tax on the capital gain of $4,000, we must first understand the basics of income taxation and how capital gains are taxed. Calculating Jeremy's taxable income would involve subtracting the standard deduction and personal exemption from his adjusted gross income.
Assuming Jeremy is a single filer and without knowing his total adjusted gross income, we cannot precisely calculate his tax due. However, long-term capital gains are typically taxed at a lower rate than ordinary income. For instance, if Jeremy falls under the 15% income tax bracket, his capital gain may be taxed at a 0% rate according to the IRS tax brackets for long-term capital gains. However, if his adjusted gross income places him in a higher tax bracket, his long-term capital gain might be taxed at 15% or 20%.
After calculating the tax on ordinary income using the tax tables and adding the tax on long-term capital gains, Jeremy would then compare the total tax liability to the amount of tax that has been withheld or paid in advance through quarterly payments. If he has withheld or paid more than his liability, he will receive a tax refund. Conversely, if his payments were less than the liability, he will owe additional tax.