Matt and Meg Comer are married. They do not have any children. Matt works as a h
ID: 2445346 • Letter: M
Question
Matt and Meg Comer are married. They do not have any children. Matt works as a history professor at a local university and earns a salary of $64,000. Meg works part-time at the same university. She earns $21,000 a year. The couple does not itemize deductions. Other than salary, the Comers’ only other source of income is from the disposition of various capital assets (mostly stocks). (Use the tax rate schedules.)
What is the Comers’ tax liability for 2015 if they report the following capital gains and losses for the year?
What is the Comers’ tax liability for 2015 if they report the following capital gains and losses for the year?
What is the Comers’ tax liability for 2015 if they report the following capital gains and losses for the year?
Explanation / Answer
(a) Total income of Matt and Meg Comer ($64000 +$21000) = $85000.
Add: Net short-term capital gains $7000
Add: Net long-term capital gains $9000
Adjusted Gross Income $101000
Less: Standard Deduction $12600
Taxable Income $88400
Tax liability on $88400 will be as follow;
Upto $18450 @10% = $1845
$18,451 to $74,900 @ 15% = $8467.5
$74901 to $88400 @25% = $3375
Thus total tax liability = ($1845 + $8467.5 + $3375) = $13,687.5
(b) Total income of Matt and Meg Comer ($64000 +$21000) = $85000.
Add: Net short-term capital gains $1500
Add: Net long-term capital gains $3000
Adjusted Gross Income $89500
Less: Standard Deduction $12600
Taxable Income $76900
Tax liability on $76900 will be as follow;
Upto $18450 @10% = $1845
$18,451 to $74,900 @ 15% = $8467.5
$74901 to $76900 @25% = $500
Thus total tax liability = ($1845 + $8467.5 + $500) = $10,812.5