Select The Correct Answer.Hope Is A Single Taxpayer Who Earns $\$45,000$ Per Year In Taxable Income Working As A Salesperson. She Has $\$200$ In Long-term Capital Gains On An Investment That Cost Her $\$4,250$ To Purchase.

Introduction

As a single taxpayer, Hope's financial situation is subject to various tax laws and regulations. In this article, we will delve into Hope's tax situation, focusing on her taxable income, long-term capital gains, and the implications of these on her tax liability.

Hope's Taxable Income

Hope earns $\$45,000$ per year in taxable income from her job as a salesperson. This income is subject to taxation, and Hope will need to report it on her tax return. As a single taxpayer, Hope's tax rate will depend on her taxable income and the tax brackets applicable to her.

Long-Term Capital Gains

Hope has $\$200$ in long-term capital gains from an investment that cost her $\$4,250$ to purchase. Long-term capital gains are profits from the sale of investments held for more than one year. These gains are subject to taxation, but the tax rate applicable to long-term capital gains is generally lower than the tax rate applicable to ordinary income.

Calculating Hope's Tax Liability

To calculate Hope's tax liability, we need to consider both her taxable income and her long-term capital gains. The tax rate applicable to Hope's taxable income will depend on the tax brackets applicable to her. For the 2022 tax year, the tax brackets for single taxpayers are as follows:

Calculating Hope's Tax Liability

Based on the tax brackets applicable to Hope, we can calculate her tax liability as follows:

1. Taxable Income: Hope's taxable income is $\$45,000$.
2. Tax Rate: Based on the tax brackets applicable to Hope, her tax rate is 22%.
3. Tax Liability: Hope's tax liability is calculated as follows:

Tax Liability = Taxable Income x Tax Rate = $\$45,000$ x 0.22 = $\$9,900$

Long-Term Capital Gains Tax

Hope has $\$200$ in long-term capital gains. The tax rate applicable to long-term capital gains is generally lower than the tax rate applicable to ordinary income. For the 2022 tax year, the tax rate applicable to long-term capital gains is 15% for most taxpayers.

Calculating Long-Term Capital Gains Tax

Based on the tax rate applicable to long-term capital gains, we can calculate Hope's long-term capital gains tax as follows:

Long-Term Capital Gains Tax = Long-Term Capital Gains x Tax Rate = $\$200$ x 0.15 = $\$30$

Total Tax Liability

Hope's total tax liability is the sum of her tax liability on her taxable income and her long-term capital gains tax.

Total Tax Liability = Tax Liability + Long-Term Capital Gains Tax = $\$9,900$ + $\$30$ = $\$9,930$

Conclusion

In conclusion, Hope's tax situation is subject to various tax laws and regulations. Her taxable income and long-term capital gains are subject to taxation, and she will need to report them on her tax return. By understanding the tax brackets applicable to her and the tax rates applicable to her taxable income and long-term capital gains, Hope can calculate her total tax liability and ensure compliance with tax laws and regulations.

Recommendations

Based on Hope's tax situation, the following recommendations can be made:

1. Keep accurate records: Hope should keep accurate records of her taxable income and long-term capital gains to ensure compliance with tax laws and regulations.
2. Consult a tax professional: Hope may want to consult a tax professional to ensure that she is taking advantage of all available tax deductions and credits.
3. Stay informed: Hope should stay informed about changes to tax laws and regulations that may affect her tax situation.

Introduction

In our previous article, we explored Hope's tax situation as a single taxpayer with $\$45,000$ in taxable income and $\$200$ in long-term capital gains. In this article, we will answer some frequently asked questions (FAQs) related to Hope's tax situation.

Q: What is the tax rate applicable to Hope's taxable income?

A: Based on the tax brackets applicable to Hope, her tax rate is 22%. This is because her taxable income of $\$45,000$ falls within the tax bracket of $40,126 - $80,250.

Q: How is Hope's long-term capital gains tax calculated?

A: Hope's long-term capital gains tax is calculated by multiplying her long-term capital gains by the tax rate applicable to long-term capital gains, which is 15% for most taxpayers.

Q: What is the difference between ordinary income and long-term capital gains?

A: Ordinary income refers to income earned from a job or business, such as wages, salaries, and tips. Long-term capital gains, on the other hand, refer to profits from the sale of investments held for more than one year.

Q: Can Hope deduct her long-term capital gains from her taxable income?

A: No, Hope cannot deduct her long-term capital gains from her taxable income. Long-term capital gains are subject to taxation, but they are not deductible from taxable income.

Q: What is the tax liability on Hope's taxable income?

A: Hope's tax liability on her taxable income is $\$9,900$, which is calculated by multiplying her taxable income by the tax rate applicable to her.

Q: What is the total tax liability on Hope's taxable income and long-term capital gains?

A: Hope's total tax liability is the sum of her tax liability on her taxable income and her long-term capital gains tax, which is $\$9,930$.

Q: Can Hope claim any tax credits or deductions?

A: Yes, Hope may be eligible to claim tax credits or deductions, such as the Earned Income Tax Credit (EITC) or the Child Tax Credit. However, these credits and deductions are subject to specific eligibility requirements and may have income limits.

Q: How can Hope minimize her tax liability?

A: Hope can minimize her tax liability by taking advantage of tax deductions and credits, such as the EITC or the Child Tax Credit. She can also consider consulting a tax professional to ensure that she is taking advantage of all available tax savings opportunities.

Q: What is the deadline for filing Hope's tax return?

A: The deadline for filing Hope's tax return is typically April 15th of each year. However, this deadline may be extended in certain circumstances, such as if Hope needs more time to gather information or if she is experiencing a hardship.

Conclusion

In conclusion, Hope's tax situation is subject to various tax laws and regulations. By understanding the tax brackets applicable to her and the tax rates applicable to her taxable income and long-term capital gains, Hope can calculate her total tax liability and ensure compliance with tax laws and regulations. We hope that this Q&A article has provided helpful information and insights for Hope and other taxpayers.