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Question: linette a single taxpayer had the tollowing income and deductions...

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Linette, a single taxpayer, had the tollowing income and deductions tor the tax year 2018: C ck the icon to view the income and deductions. Click the icon to v ew the standard deduction amounts 을 (Cick the con to ew the 2018 tax rate schedule or he Single ng status. Read the requirements Requirement a. Compute Linettes taxable income and federal tax liability for 2018. First calculate the gross income, then calculate taxable income and the federal tax liability. (Calculate the tax using the tax rate schedule. Do not round interim tax calculations. Round the amount entered into the cell to the nearest whole dollar. If an input ficld is not used in the table, leave the input field empty, do not select a label or enter a zero.) Total income from whatever source derived Minus: Exclusions, as provided in the tax law Gross incomeReference STANDARD DEDUCTION Fling Status Married individuals filing joint returns and surviving spouses Heads of houscholds Unmarried individuals (other than surviving spouses and heads of households) Married individuals filing separate retuns Additional standard deduction for the aged and the blind 5 24,000 18,000 12,000 12,000 Single If taxable income is Not over $9,525 Over $9,525 but not over $38,700 Over $38,700 but not over $82,500 Over $82,500 but not over $157,500 Over $157,500 but not over $200,000 Over $200,000 but not over $500,000 Over $500,000 The tax is: 10% of taxable income. $952.50 12% of the excess over S9.525. $4453 50 + 22% of the excess over $38,700. $14,089.50 + 24% of the excess over $82,500 $32.089.50 + 32% of the excess over $157,500. $45,689.50 + 35% of the excess over $200,000. $150,689.50 + 37% of the excess over $500,000 Individual who is mamied and surviving spouses 1.300 Individuall who is unmarried and not a surviving spouse Taxpayer claimed as dependent on another taxpayers return: Greater of (1) earned income plus $350 or (2) $1,050 These amounts are $2,600 and $3,200, respectively, for a taxpayer who is both aged and blind 1,600 Personal and Dependency Exemptions Suspended: In conjunction with the increased standard deduction amount, the Tax Cuts and Jobs Act reduces the personal exemption amount to S0 for tax years from 2018 through 2025, erfectively suspending the exemptions for these years. Print DoneINCOME STANDARD DEDUCTION 65,000 22,000 12,000 4.700 103,700 Filing Status Business Income Interest income from taxable bonds Tax-exempt bond interest TOTAL INCOME Married individuals filing joint returns and surviving spouses Heads of households Unmarried individuals (other than surviving spouses and heads of households) Married individuals filing separate returns Additional standard deduction for the aged and the blind S 24,000 18,000 12,000 12,000 DEDUCTIONS: Business expenses 11,500 15,000 1,300 1,600 Itemized deductions Individual who is married and surviving spouses Individual who is unmarried and not a surviving spouse Taxpayer claimed as dependent on another taxpayers return: Greater of (1) eamed income plus $350 or (2) $1,050 TOTAL DEDUCTIONS 26,500 Requirements These amounts are $2,600 and $3,200, respectively, for a taxpayer who is both aged and blind. Personal and Dependency Exemptions Suspended: In conjunction with the increased standard deduction amount, the Tax Cuts and Jobs Act reduces the personal exemption amount to 50 for tax years from 2018 through 2025, effectively suspending the exemptions for these years a. Compute Linettes taxable income and federal tax liability for 2018 (round to dollars). b. Compute Linettes marginal, average, and effective tax rates. Print Done | C. For tax planning purposes, which ofthe three rates in Part b is the most important?

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