Jamie is single. In 2017, she reported $100,000 of taxable income, including a long-term capital gain of $5,000. What is her gross tax liability, rounded to the nearest whole dollar amount? (use the tax rate schedules)

Question

Quizplus · Accepted Answer

To calculate Jamie's gross tax liability, we need to use the tax rate schedule for single filers in 2017. Based on the taxable income of $100,000, Jamie falls in the 28% tax bracket. We can use the formula: 
(Taxable income - (tax bracket threshold)) x (tax rate) + (flat tax amount)

For Jamie, this formula would look like:
($100,000 - $91,900) x 0.28 + $18,713.75 = $20,332.75

Since we need to round to the nearest whole dollar amount, Jamie's gross tax liability would be $20,332. Therefore, the best choice is C.

Jamie Is Single