Question

2013 Individual Tax Rates Single Individuals If a Corporation's Taxable Income Is It Pays This Amount...

2013 Individual Tax Rates
Single Individuals

If a Corporation's Taxable Income Is
It Pays This
Amount on the
Base of the Bracket
Plus This Percentage
on the Excess over the
Base (Marginal Rate)
Average Tax
Rate at
Top of Bracket
Up to $8,925 $0 10.0% 10.0%
$8,925 - $36,250 892.50 15.0 13.8
$36,250 - $87,850 4,991.25 25.0 20.4
$87,850 - $183,250 17,891.25 28.0 24.3
$183,250 - $398,350 44,603.25 33.0 29.0
$398,350 - $400,000 115,586.25 35.0 29.0
Over $400,000 116,163.75 39.6 39.6

Standard deduction for individual: $6,100

Married Couples Filing Joint Returns

If a Corporation's Taxable Income Is
It Pays This
Amount on the
Base of the Bracket
Plus This Percentage
on the Excess over the
Base (Marginal Rate)
Average Tax
Rate at
Top of Bracket
Up to $17,850 $0 10.0% 10.0%
$17,850 - $72,500 1,785.00 15.0 13.8
$72,500 - $146,400 9,982.50 25.0 19.4
$146,400 - $223,050 28,457.50 28.0 22.4
$223,050 - $398,350 49,919.50 33.0 27.1
$398,350 - $450,000 107,768.50 35.0 28.0
Over $450,000 125,846.00 39.6 39.6

Standard deduction for married couples filing jointly: $12,200

Quantitative Problem: Jenna is a single taxpayer with no dependents so she qualifies for one personal exemption. During 2013, she earned wages of $115,000. She doesn't itemize deductions, so she will take the standard deduction and her personal exemption to calculate 2013 taxable income. In addition, during the year she sold common stock that she had owned for five years for a net profit of $5,600. How much does Jenna owe to the IRS for taxes? Round your intermediated and final answers to the nearest cent.

=???

2013 Corporate Tax Rates

If a Corporation's
Taxable Income Is
It Pays This
Amount on the
Base of the Bracket
Plus This Percentage
on the Excess over the
Base (Marginal Rate)
Average Tax
Rate at
Top of Bracket
Up to $50,000 $0 15.0% 15.0%
$50,000 - $75,000 7,500 25.0 18.3
$75,000 - $100,000 13,750 34.0 22.3
$100,000 - $335,000 22,250 39.0 34.0
$335,000 - $10,000,000 113,900 34.0 34.0
$10,000,000 - $15,000,000 3,400,000 35.0 34.3
$15,000,000 - $18,333,333 5,150,000 38.0 35.0
Over $18,333,333 6,416,667 35.0 35.0

Quantitative Problem: Andrews Corporation has income from operations of $246,000. In addition, it received interest income of $24,600 and received dividend income of $29,000 from another corporation. Finally, it paid $9,100 of interest income to its bondholders and paid $45,200 of dividends to its common stockholders. Using the 2013 corporate tax schedule, what is the firm’s federal income tax? Round your intermediated and final answers to the nearest cent.

=???

Homework Answers

Answer #1
Income from operations $   2,46,000
Add:
Interest income $       24,600
Taxable portion of dividend income = 29000*30% = $         8,700
Less:
Interest expense $         9,100
Taxable income $   2,70,200
Federal income tax = 22250+(270200-100000)*39% = $       88,628
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