Jonathan Alexander is a self-employed petroleum engineer based in Tulsa, Oklahoma, who earns a salary from a part-time consulting contract with an energy firm in addition to running his own independent geotechnical consulting practice. During 2024, he received interest income from a high-yield savings account, qualified dividends from a diversified equity portfolio, and recognized a long-term capital gain from the sale of appreciated stock he had held for several years. He pays significant mortgage interest and state and local taxes on his primary residence, supporting an itemized deduction strategy.
Correct Answers
A G I
$234,050.00
gross Income
$238,550.00
tax Liability
$39,400.00
taxable Income
$202,850.00
refund Or Due Amount
$15,920.00
refund Or Due Direction
Balance Due
Step-by-Step Solution
TAX FORMULA — Jonathan Alexander (SINGLE) GROSS INCOME Wages: $142,300.00 Interest Income: $4,100.00 Ordinary Dividends: $1,750.00 Business Income: $65,400.00 Capital Gain: $25,000.00 = Gross Income: $238,550.00 − Above-Line Deductions: $4,500.00 = AGI: $234,050.00 DEDUCTIONS Standard Deduction (single): $14,600.00 Itemized Deductions: $31,200.00 Deduction Used: $31,200.00 (itemized) = Taxable Income: $202,850.00 TAX CALCULATION Ordinary Taxable Income: $177,000.00 Ordinary Tax: $35,522.50 LTCG + Qualified Div: $25,850.00 LTCG Tax: $3,877.50 − Credits: $0.00 = Tax Liability: $39,400.00 − Taxes Withheld: $23,480.00 = Tax Due: $15,920.00