Clifford Bancroft is a single aerospace engineer living in Huntsville, Alabama, who earns a substantial salary from a defense contractor and operates a part-time technical consulting practice on the side. He received interest income from a municipal bond fund and a brokerage account, qualified dividends from long-term equity holdings, and recognized a capital gain from selling appreciated stock. Clifford itemizes deductions including mortgage interest on his primary residence, state and local taxes (capped at $10,000), and significant charitable contributions to STEM education nonprofits.
Correct Answers
A G I
$357,150.00
gross Income
$362,250.00
tax Liability
$75,797.25
taxable Income
$315,350.00
refund Or Due Amount
$46,317.25
refund Or Due Direction
Balance Due
Step-by-Step Solution
TAX FORMULA — Clifford Bancroft (SINGLE) GROSS INCOME Wages: $303,900.00 Interest Income: $5,250.00 Ordinary Dividends: $2,700.00 Business Income: $26,900.00 Capital Gain: $23,500.00 = Gross Income: $362,250.00 − Above-Line Deductions: $5,100.00 = AGI: $357,150.00 DEDUCTIONS Standard Deduction (single): $14,600.00 Itemized Deductions: $41,800.00 Deduction Used: $41,800.00 (itemized) = Taxable Income: $315,350.00 TAX CALCULATION Ordinary Taxable Income: $290,600.00 Ordinary Tax: $72,084.75 LTCG + Qualified Div: $24,750.00 LTCG Tax: $3,712.50 − Credits: $0.00 = Tax Liability: $75,797.25 − Taxes Withheld: $29,480.00 = Tax Due: $46,317.25