Here's the breakdown:Taxable income: $60,000:
First, we need to determine which tax bracket Jerry falls into. The 2021 tax rate schedule for single filers is as follows:
- 10% on taxable income from $0 to $9,950
- 12% on taxable income from $9,951 to $40,525
- 22% on taxable income from $40,526 to $86,375
- 24% on taxable income from $86,376 to $164,925
- 32% on taxable income from $164,926 to $209,425
- 35% on taxable income from $209,426 to $523,600
- 37% on taxable income over $523,600
Based on Jerry's taxable income of $60,000, he falls into the 12% tax bracket. To calculate Jerry's tax liability, we will need to use a combination of the tax rates for the different brackets he falls into. Here's the breakdown:
- Jerry owes 10% on the first $9,950 of his taxable income, which amounts to $995.
- He owes 12% on the remaining $50,050 of his taxable income, which amounts to $6,006.
Adding these two amounts together, Jerry's total tax liability for 2021 would be $6,006 + $995 = $7,001. Therefore, Jerry's tax liability for the year is $7,001.