Question

Angelena files as a head of household. In 2022 , she reported $56,800 of taxable income, including a $10,000 qualified dividend. What is her gross tax liability? (Use the tax rate schedules, long-term capital gains tax brackets.) Note: Round your answer to the nearest whole dollar amount. Multiple Choice $6,613 $5,473 $5,323 $6,824

Answer 1

Angelena's gross tax liability would involve calculating the tax on her ordinary income using the head of household tax brackets, plus the tax on her qualified dividends at their special capital gains rate. An exact amount cannot be provided without the specific tax rate schedules and long-term capital gains brackets for 2022.

Step-by-step explanation:

Gross Tax Liability Calculation

To calculate Angelena's gross tax liability for the year 2022 as a head of household reporting $56,800 of taxable income, including a $10,000 qualified dividend, we need to consider the income tax brackets and the lower tax rates for qualified dividends. The ordinary income would be taxed according to the standard tax brackets applicable to a head of household, while the qualified dividends are often taxed at a lower capital gains rate. Unfortunately, without the specific tax rate schedules and long-term capital gains brackets for 2022, we cannot provide an exact figure. However, the calculation would typically involve determining the tax on ordinary income according to the relevant brackets and then adding the tax on qualified dividends at their special rates.

Normally, the tax on the ordinary income portion would first be calculated using the progressive tax rates, then the tax on qualified dividends would be calculated using the capital gains tax rate. The total gross tax liability would be the sum of these two amounts.

Answer 2

To calculate Angelena's gross tax liability, we need to determine her taxable income and then use the tax rate schedules to calculate her tax liability. According to the question, Angelena reported $56,800 of taxable income, including a $10,000 qualified dividend. Since Angelena files as head of household, we can use the tax rate schedules for head of household filers to determine her tax liability.

First, we need to determine the tax rate for Angelena's qualified dividend. According to

2

, qualified dividends are taxed at the same rates as the capital gains tax rate. For tax year 2022, the qualified dividend tax rate increases to 15% for taxable income between $55,801 and $488,500 for head of household filers. Since Angelena's taxable income is $56,800, her qualified dividend tax rate is 15%.

Next, we need to determine Angelena's tax liability for her ordinary income. To do this, we can use the tax rate schedules for head of household filers. According to the tax rate schedules for tax year 2022, the tax on $56,800 for a head of household filer is calculated as follows:

The first $14,200 is taxed at 10% = $1,420

The next $45,550 ($56,800 - $14,200 - $10,000) is taxed at 12% = $5,466

Total tax liability for ordinary income = $1,420 + $5,466 = $6,886

Finally, we can calculate Angelena's gross tax liability by adding her tax liability for her qualified dividend and her tax liability for her ordinary income:

Tax liability for qualified dividend = $10,000 x 15% = $1,500

Tax liability for ordinary income = $6,886

Gross tax liability = $1,500 + $6,886 = $8,386

Therefore, Angelena's gross tax liability is $8,386. The closest answer choice is $6,824, but this is not the correct answer.