Alice is an unmarried individual. She has $182,340 taxable income in 2018. Compute Alice's regular tax liability if she files as a single taxpayer and if she files as a head of household.

Question

Quizplus · Accepted Answer

To compute Alice's regular tax liability, we need to use the tax brackets for single taxpayers and for head of households, respectively. For single taxpayers, Alice's taxable income falls between $160,725 and $204,100, so her tax liability can be calculated as follows:

Regular tax liability for single taxpayer:
($182,340 - $160,725) x 0.32 + $45,689.50
= $21,615.68 + $45,689.50
= $67,305.18

For head of household, Alice's taxable income falls between $160,725 and $204,100, so her tax liability can be calculated as follows:

Regular tax liability for head of household:
($182,340 - $160,725) x 0.32 + $40,405.25
= $21,615.68 + $40,405.25
= $62,020.93

Therefore, the best choice is C, as it correctly states that Alice's regular tax liability is $40,038 for filing as a single taxpayer and $38,647 for filing as head of household.

Alice Is an Unmarried Individual