Constance Whitfield is a single orthopedic surgeon based in Scottsdale, Arizona, who earns a substantial salary from her hospital employment as well as net income from a private consulting practice she operates as a sole proprietor. During 2024, she sold appreciated stock resulting in a $25,000 long-term capital gain, received interest from a high-yield savings account, and collected dividends from her brokerage portfolio. Her above-the-line deductions consist of self-employment tax deduction related to her consulting business, and she has significant itemized deductions from mortgage interest on her primary residence, state and local taxes (capped), and charitable contributions.
Correct Answers
A G I
$250,850.00
gross Income
$254,450.00
tax Liability
$43,211.50
taxable Income
$219,650.00
refund Or Due Amount
$28,931.50
refund Or Due Direction
Balance Due
Step-by-Step Solution
TAX FORMULA — Constance Whitfield (SINGLE) GROSS INCOME Wages: $160,500.00 Interest Income: $5,100.00 Ordinary Dividends: $6,150.00 Business Income: $57,700.00 Capital Gain: $25,000.00 = Gross Income: $254,450.00 − Above-Line Deductions: $3,600.00 = AGI: $250,850.00 DEDUCTIONS Standard Deduction (single): $14,600.00 Itemized Deductions: $31,200.00 Deduction Used: $31,200.00 (itemized) = Taxable Income: $219,650.00 TAX CALCULATION Ordinary Taxable Income: $191,350.00 Ordinary Tax: $38,966.50 LTCG + Qualified Div: $28,300.00 LTCG Tax: $4,245.00 − Credits: $0.00 = Tax Liability: $43,211.50 − Taxes Withheld: $14,280.00 = Tax Due: $28,931.50