Question

Christina is single with a 12 year old daughter who lives with her. She files her...

Christina is single with a 12 year old daughter who lives with her. She files her tax return as Head of Household. Her 2019 income from wages is $425,350. She has “net long-term capital gains” of $100,000. Total 2019 gross income is $525,350. She is under 65 years of age and does not itemize her deductions. What is her total federal income tax (remember, the 2019 “qualified dividends – capital gains” worksheet)?

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Answer:

Calculation of Federal Income Tax on Long term capital gains

Particulars Amount
Long Term Capital Gain 100,000
Tax Rate on Long term capital gain (Income $ 425,350)

15%
Federal tax on the Long term Capital Gain 15,000

Calculation of Federal Income Tax on Christina's Income

Particulars Amount Amount
Income from Wages 425,350
Income Tax for 2019
Tax on first 13,850 (10%) 1,385.00
Tax on 38,999 (52,850-13,850) (12%) 4,679.88
Tax on 31,349 (84,200-52,851) (22%) 6,896.78
Tax on 76,499 (160,700-84,201) (24%) 18,359.76
Tax on 43,399 (204,100-160,701) (32%) 13,887.68
Tax on 221,249 (425,350-204,101) (35%) 77,437.15
Total Federal Income Tax 122,646.25

Hence, The total Federal Income Tax of Christina for the year 2019 is 137,646.25 (122,646.25 + 15,000)

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