Answer:
Henrich has to pay $154,672.50 (32%) in taxes on his $484,500 income
Step-by-step explanation:
The question is: What is Henrich's income tax liability in each of the following alternative scenarios?
Here are the scenarios:
1. All of his income is salary from his employer. Assume his modified AGI is $520,000.
2. His $484,500 of taxable income includes $2,000 of long-term capital gain that is taxed at preferential rates. Assume his modified AGI is $520,000.
3. His $484,500 of taxable income includes $48,000 of long-term capital gain that is taxed at preferential rates. Assume his modified AGI is $520,000.
4. Henrich has $197,250 of taxable income, which includes $50,900 of long-term capital gain that is taxed at preferential rates. Assume his modified AGI is $214,500.
Here are the answers:
1. Henrich's income tax liability is $133,476.25.
2. Henrich's income tax liability is $133,476.25 and his net investment income tax liability is $0.
3. Henrich's income tax liability is $133,476.25 and his net investment income tax liability is $1,344.
4. Henrich's income tax liability is $54,175.00 and his net investment income tax liability is $745.00.
1. Henrich has a total income of $484,500.
2. He has to pay $133,476.25 in income tax.
3. He also has to pay $21,196.25 in net investment income tax.
4. If he has $2,000 or less in long-term capital gains, he doesn't have to pay any net investment income tax.
5. If he has more than $2,000 in long-term capital gains, he has to pay a net investment income tax of 3.8% on the amount over $2,000.
Tax on his investment income:
1. Henrich's income tax liability is $133,476.25.
2. His net investment income tax liability is $21,196.25.
3. His net investment income tax liability is $0.
4. His net investment income tax liability is $1,344.00.
5. His net investment income tax liability is $745.00.
1. Henrich has to pay $133,476.25 in taxes.
2. If he has some long-term capital gains, he only has to pay taxes on $2,000 of it.
3. If he has more than $48,000 in long-term capital gains, he has to pay taxes on the amount over $48,000.
4. If he has less than $197,250 in taxable income, he only has to pay taxes on $50,900 of it.
1. Henrich's income tax liability is $133,476.25.
2. If he has long-term capital gains, his net investment income tax liability is $0 if it is less than $2,000.
3. If he has long-term capital gains, his net investment income tax liability is $1,344 if it is more than $48,000.
4. Henrich's income tax liability is $54,175 if his taxable income is less than $197,250.
**Scenario 1: All of his income is salary from his employer. Assume his modified AGI is $520,000.**
Henrich's income tax liability is $133,476.25. This is calculated by first finding his tax bracket, which is the 24% bracket. Then, he multiplies his taxable income by the tax rate for that bracket, which is 24%. This gives him an income tax liability of $112,280.00. He also has a net investment income tax liability of $21,196.25. This is calculated by first finding his net investment income, which is $40,000. Then, he multiplies his net investment income by the net investment income tax rate, which is 3.8%. This gives him a net investment income tax liability of $1,520.00.
**Scenario 2: His $484,500 of taxable income includes $2,000 of long-term capital gain that is taxed at preferential rates. Assume his modified AGI is $520,000.**
Henrich's income tax liability is $133,476.25. This is calculated in the same way as in Scenario 1. His net investment income tax liability is $0. This is because his net investment income is only $2,000, which is below the threshold for the net investment income tax.
**Scenario 3: His $484,500 of taxable income includes $48,000 of long-term capital gain that is taxed at preferential rates. Assume his modified AGI is $520,000.**
Henrich's income tax liability is $133,476.25. This is calculated in the same way as in Scenario 1. His net investment income tax liability is $1,344.00. This is calculated by first finding his net investment income, which is $48,000. Then, he subtracts the preferential rate amount, which is $2,000. This gives him a net investment income of $46,000. Then, he multiplies his net investment income by the net investment income tax rate, which is 3.8%. This gives him a net investment income tax liability of $1,728.00.
**Scenario 4: Henrich has $197,250 of taxable income, which includes $50,900 of long-term capital gain that is taxed at preferential rates. Assume his modified AGI is $214,500.**
Henrich's income tax liability is $54,175.00. This is calculated by first finding his tax bracket, which is the 22% bracket. Then, he multiplies his taxable income by the tax rate for that bracket, which is 22%. This gives him an income tax liability of $43,395.00. He also has a net investment income tax liability of $745.00. This is calculated in the same way as in Scenario 3.
chatgpt
bardAI