Question

Carson is filing as single and has 2019 taxable income of $50,000 which includes $30,000 0%/15%/20% net long-term capital gain. What is his tax on taxable income?

Answer 1

Tax On Taxable Income

$ 3,784.75

Explanation:

(1)

Total Taxable Income	$50,000
Less; Preferentially Taxed Income	($30,000)
Income Taxed at Ordinaro Rates	$ 20,000

(2) Tax Schedule For 2019 For Single:

12% = $9,701 to $39,475 = $ 970 plus 12% of the amount over $9,700

3) Tax on ordinary Income:

= $ 970 + ( $ 20,000 - $9700 ×12%)

= $970 + $ 1236

= $ 2206

4) Tax on long term Capital Gain:

= ($50,000 - $39,475) × 15%

= $ 1578.75

5) Total Tax:

= $ 2206 + $ 1578.75

= $ 3,784.75