Question

Jenna is a single taxpayer with no dependents so she qualifies for one personal exemption. During 2013, she earned wages of $138,000. She doesn't itemized deductions, so she will take the standard deduction and her personal exemption to calculate 2013 taxable income. In addition, during the year she sold common stock that she had owned for five years for a net profit of $5,800. How much does Jenna owe to the IRS for taxes

Answer 1

$30,003.25

Step-by-step explanation:

Jenna'a taxable ordinary income = $138,000 - $6,100 (standard deduction) - $3,900 (personal exemption) = $128,000

ordinary income taxes = $17,891.25 + [($128,000 - $87,850) x 28%] = $29,133.25

capital gains taxes = $5,800 x 15% = $870

total tax liability = $29,133.25 + $870 = $30,003.25