Archibald Fitzgerald is a single petroleum engineer based in Houston, Texas, who earned $216,900 in wages from a regional energy firm and an additional $22,300 in net profit from a small consulting practice he operates independently. He holds a diversified brokerage account generating $7,750 in interest, $4,350 in ordinary dividends (of which $3,650 are qualified), and $1,500 in long-term capital gains from stock sales. He paid $4,700 in deductible student loan interest above the line and has significant itemized deductions consisting of $18,200 in mortgage interest, $7,600 in state and local taxes (SALT, capped at $10,000), and $5,600 in charitable cash contributions.
Correct Answers
A G I
$248,100.00
gross Income
$252,800.00
tax Liability
$46,155.00
taxable Income
$216,700.00
refund Or Due Amount
$9,935.00
refund Or Due Direction
Balance Due
Step-by-Step Solution
TAX FORMULA — Archibald Fitzgerald (SINGLE) GROSS INCOME Wages: $216,900.00 Interest Income: $7,750.00 Ordinary Dividends: $4,350.00 Business Income: $22,300.00 Capital Gain: $1,500.00 = Gross Income: $252,800.00 − Above-Line Deductions: $4,700.00 = AGI: $248,100.00 DEDUCTIONS Standard Deduction (single): $14,600.00 Itemized Deductions: $31,400.00 Deduction Used: $31,400.00 (itemized) = Taxable Income: $216,700.00 TAX CALCULATION Ordinary Taxable Income: $211,550.00 Ordinary Tax: $45,382.50 LTCG + Qualified Div: $5,150.00 LTCG Tax: $772.50 − Credits: $0.00 = Tax Liability: $46,155.00 − Taxes Withheld: $36,220.00 = Tax Due: $9,935.00