Question

Calculate the 2020 total tax for Gordon Geist, a single taxpayer without dependents and no itemized deductions. He has an active income of $36,000, a short-term capital gain income of $4,500 from the sale of stock, and $6,200 from book royalties. What is Gordon's average tax rate? Gordon's total gross income for the 2020 tax year is $ (Round to the nearest cent.)

Answer 1

Gordon Geist's total gross income for 2020 is $46,700, calculated by summing his active income, short-term capital gains, and book royalties. The average tax rate can't be determined without specific tax rate information. However, the marginal tax rate is the rate applied to the highest dollar of income earned.

Step-by-step explanation:

To calculate Gordon Geist's total gross income for the 2020 tax year, we must add his active income, short-term capital gain income, and book royalties. So the calculation would be as follows: $36,000 (active income) + $4,500 (short-term capital gains) + $6,200 (book royalties) = $46,700.

The average tax rate is determined by dividing the total tax paid by the total income earned. If we do not have the specific tax brackets Gordon falls into or the exact tax owed, we can't provide the average tax rate. However, if we assume he falls into the same brackets as the example with the $35,000 income, we use the provided tax bracket information for an estimation.

Firstly, we calculate the tax on each portion of his income according to the brackets:
10% on $9,075

• 15% on the amount between $9,075 and $36,900
• 25% on the remaining income, if there is any that exceeds $36,900

However, without exact tax thresholds and rates for the year 2020, we cannot provide the exact total tax amount for Gordon Geist. The marginal tax rate is applied to the highest dollar earned and explains how much tax is paid on an additional dollar of income.