Find the tax in the following application problems. Use $4050 for each personal deduction, a standard deduction of $6300 for single taxpayers, $12,600 for married taxpayers filing jointly, $6300 for married taxpayers filing separately, and $9300 for head of household and the tax rate schedule.
-Mark Collins had an adjusted gross income of $26,741 last year. He had deductions of $899 for state income tax, $555 for property tax, $2,824 in mortgage interest, and $221 in contributions. Collins claims one exemption and files as a single person.

Question

Find the tax in the following application problems. Use $4050 for each personal deduction, a standard deduction of $6300 for single taxpayers, $12,600 for married taxpayers filing jointly, $6300 for married taxpayers filing separately, and $9300 for head of household and the tax rate schedule. 
-Mark Collins had an adjusted gross income of $26,741 last year. He had deductions of $899 for state income tax, $555 for property tax, $2,824 in mortgage interest, and $221 in contributions. Collins claims one exemption and files as a single person.

Quizplus · Accepted Answer

First, we need to find Collins' taxable income:
Adjusted Gross Income: $26,741
Less: Personal Deduction: $4,050
Less: Standard Deduction: $6,300
Less: State Income Tax: $899
Less: Property Tax: $555
Less: Mortgage Interest: $2,824
Less: Contributions: $221
Taxable Income: $12,892

Using the tax rate schedule, we can find the tax:
10% of $9,325 = $932.50
15% of $3,567 = $535.05
Total Tax: $1,467.55

However, since Collins claims one exemption, we need to subtract the exemption amount from the tax:
$1,467.55 - $4,050 = $(-2,582.45)

Since the result is negative, we can assume that Collins does not owe any federal income tax. However, he may be eligible for a refund of any taxes that were withheld from his paycheck throughout the year.

Therefore, the best choice is B, which is the closest to the calculated tax amount but also takes into account the possibility of a refund.

Find the Tax in the Following Application Problems