Question

Part A Jim is a Mechanical Engineer. He earns $142000/year after allowable deductions. What will he owe the IRS in 2018? $

Part B Jim is offered a new position that will double his taxable income for 2018. If he accepts the new position how much more will he owe the IRS in 2018? $

Jim's boss Ron will have $626000/year taxable income in 2018. What will he owe the IRS?

Answer 1

Part-A

Taxable Income of Jim=$142000

Tax on Income= 14089.50+24%(142000-82500)=$28369.50

Hence, IRS he owe in 2018 is $28369.50

Part-B

Existing Taxable Income= $142000

Revise Income on new position ($142000X2)=$284000

Taxable Income=$284000

Tax on income=$45689.50+35%(284000-200000)=$75089.50

If he accepts new position, he owe to IRS amount in 2018 is $75089 .50

Jim Boss will have Taxable Income $626000 in 2018

Tax on Income= $150689.50+37%(626000-500000)=$197309.50

hence IRS to owe $197309.50