Eva received $82,000 in compensation payments from JAZZ Corporation during 2021. Eva incurred $15,500 in business expenses relating to her work for JAZZ Corporation JAZZ did not reimburse Eva for any of these expenses.


Screenshot 2024 01 11 185227

It is asked in question that Eva received $82,000 in compensation payments from JAZZ Corporation during 2021. Eva incurred $15,500 in business expenses relating to her work for JAZZ Corporation JAZZ did not reimburse Eva for any of these expenses.

Screenshot 2024 01 11 185227

In the problem, it is given that Eva received $82000 in compensation payments from JAZZ during 2021 and Eva incurred $15,500 in business expenses relating to her work for JAZZ and not get the reimburse for any expenses. Eva deducts a standard deduction of 12,550.

what would be the regular tax liability of Eva for this year, assuming that Eva is considered to be a self-employed contractor.

Tax liability includes any income tax as well as other direct and indirect taxes that the government may impose. Any taxpayer, including individuals, corporations, partnerships, LLPs, LLCs, and others, may be liable for the debt.

Explanation:

Regular tax liability of Eva , assuming that Eva is considered to be a self employed contractor, is to be determine .and the regular tax liability includes any income tax as well as other direct and indirect taxes that the government may impose.

Step 2 of 2

In order to find the regular tax liability, first calculate the net earning for self employment, taxable income and then tax liability.

step A)

Net Earning from Self Employment :compensation−business expenses

Net Earning from Self Employment :$82,000−$15,500

Net Earning from Self Employment : $66,500

Subtract the standard deduction : $66,500−$12,550

taxable income =$53,950

Now using the tax rate schedule, tax can be found.

Schedule of tax rate –

Up to $9,950: 10%

$9,951 to $40,525: 12%

$40,526 to $86,375: 22%

Assuming the tax rate is 22% for the income in the range$40,526→$86,375 ( using the tax rate schedule based on the her taxable income )

Tax liability =$53,950×22%

tax liability =$11,869

Explanation:

To find the regular tax liability, taxable income is needed to be calculated and based on the taxable income range, tax rate would be passed. tax rate is determined by using the tax rate schedule based on her taxable income

Final solution

So, Eva’s regular tax liability for the year as a self-employed contractor is $11,869.

 

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