Rick, who is single, has been offered a position as a city landscape consultant.

Question

Rick, who is single, has been offered a position as a city landscape consultant. The position pays $125,000 in cash wages. Assume Rick files single and is entitled to one personal exemption. Rick deducts the standard deduction instead of itemized deductions. (use the tax rate schedules.) b-1. Suppose Rick receives a competing job offer of $120,000 in cash compensation and nontaxable (excluded) benefits worth $4,000 What is the amount of Rick's after-tax compensation for the competing offer? (Do not round intermediate calculations. Round income tax liability and After-tax compensation to 2 decimal places. Enter deductions as negative amounts) Answer is not complete Description Amount (1) Gross income (2) For AGI deductions (3)Adjusted gross income (4) Standard deduction (5)Personal and dependency exemptions (6)Taxable income (7)Income tax liability $ 120,000 0 $ 120,000 6,350 4,000 $ 109,650 After-tax compensation 117,768.85

Explanation / Answer

Answer b-1. 1. Gross Income    120,000.00 2. For AGI Deductions                     -   3. Adjusted Gross Income    120,000.00 4. Standard Deduction        6,350.00 5. Personal and Dependency Exemption        4,050.00 6. Taxable Income    109,600.00 7. Income Tax Liability      26,581.75 After Tax Compensation      83,018.25 Income Tax Liability = $18,713.75 + 28% X ($120,000 - $91,900) Income Tax Liability = $18,713.75 + $7,868 Income Tax Liability = $26,581.75 Use 2017 Tax Rates

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