Ava and her husband, Leo, file a joint return and are in the 32% Federal income tax bracket (AGI is $354,951) in 2021. Ava's salary is$93,850. Her employer offers a child and dependent care reimbursement plan that allows up to $7,850 of qualifying expenses to bereimbursed in exchange for a $7,850 reduction in the employee's salary. Because Ava and Leo have two minor children requiring child carethat costs $8,635 each year, Ava is wondering if she should sign up for the program instead of taking advantage of the credit for child anddependent care expenses. Analyze the effect of the two alternatives. Assume a FICA tax rate of 7.65%.Do not round intermediate computations. If required, round your final answers to the nearest dollar.Click to view Percentage Credit based on Adjusted Gross Income.If Ava and Leo take advantage of the plan, they would• save income taxes because the reimbursement of child care expenses isa.excluded from• gross income. The income tax savingsassociated with participating in the plan would beIn addition, Ava will save $of FICA taxes due to the reduction in salary.Alternatively, if Ava does not take advantage of the plan, their child and dependent care tax credit will be $. Therefore Avaand Leo's income taxes will be $- if they do not participate in the plan.b. Assume, instead, that Ava's salary was $30,000 and Ava and Leo's AGI is $23,000 and they are in the 10% tax bracket.Theassociated with participating in the plan would be $In addition, Ava will saveof FICA taxes due to the reduction in salary.Alternatively, if Ava does not take advantage of the plan, their child and dependent care tax credit will be $. Therefore Avaand Leo's income taxes will be $- if they do not participate in the plan.

Federal Income Tax - The U.S. government's main source of money is the federal income tax. The…

Answered: 50. Her employer offers a child and…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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The Roosevelt's are financially savvy and want to take advantage of the principle of bunching. Assume for this problem, that the Roosevelts expect to pay $14,000 in tithing and $8,000 in state and local taxes for the next few years (these are their only itemized deductions). How much would bunching save them over the course of two years if their marginal tax rate is 22%? (The standard deduction for a married filing jointly taxpayer is $24,000.) $12,000 $4,840 $3,080 $3,542 $2,640 O None of the Above
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:= Question 2.5 Homework Answered Crane Flight Services contributes $25 a week to Helen's retirement plan starting immediately. Assuming she works for Crane for another twenty-two years and the applicable discount rate is 4 3/4%. Given these assumptions, the value of this employee benefit today is closest to: (state your answer to 2 decimal places) Type your numeric answer and submit 177547.78 Answered - Incorrect 1 attempt left X H You are incorrect Resubmit Consumer Loans There are two broad categories of loans, commercial and consumer. We'll talk about the characteristics and features of commercial loans in the chapter on fixed income and interest rates, but we'll deal with consumer loans here. Most consumer loans are known as fully-amortizing loans, or level- pay loans. This means that each payment is the same for the life of the loan and that both principal and C
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