Aida Hassen is single and earns $40,000 in taxable income. She uses the following tax rate schedule to calculate the taxes she owes.Up to $9,525$9,525 $38,700$38,700 - $82,500.$82,500 $157,500What is Aida's marginal tax rate?Multiple ChoiceOO10%24%22%12%10%128228248

A marginal tax rate is the difference in taxes imposed for each dollar of additional income over the…

Answered: Aida Hassen is single and earns $40,000…

Income Tax Fundamentals 2020

38th Edition

ISBN:9780357391129

Author:WHITTENBURG

Publisher:WHITTENBURG

Chapter12: Tax Administration And Tax Planning

Section: Chapter Questions

Problem 21MCQ

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Lisa records nonrefundable Federal income tax credits of 65,000 for the year. Her regular income tax liability before credits is 190,000, and her TMT is 150,000. a. What is Lisas AMT? b. What is Lisas regular income tax liability after credits?
Compute the 2019 standard deduction for the following taxpayers. a. Ellie is 15 and claimed as a dependent by her parents. She has 800 in dividends income and 1,400 in wages from a part-time job. b. Ruby and Woody are married and file a joint tax return. Ruby is age 66, and Woody is 69. Their taxable retirement income is 10,000. c. Shonda is age 68 and single. She is claimed by her daughter as a dependent. Her earned income is 500, and her interest income is 125. d. Frazier, age 55, is married but is filing a separate return. His wife itemizes her deductions.
Eagle Life Insurance Company pays its employees 0.30 per mile for driving their personal automobiles to and from work. The company reimburses each employee who rides the bus 100 a month for the cost of a pass. Tom collected 100 for his automobile mileage, and Mason received 100 as reimbursement for the cost of a bus pass. a. What are the effects of the above on Toms and Masons gross income? b. Assume that Tom and Mason are in the 24% marginal tax bracket and the actual before-tax cost for Tom to drive to and from work is 0.30 per mile. What are Toms and Masons after-tax costs of commuting to and from work?
Darrell is an employee of Whitneys. During the current year, Darrells salary is 136,000. Whitneys net self-employment income is also 136,000. Calculate the Social Security and self-employment taxes paid by Darrell and Whitney. Write a letter to Whitney in which you state how much she will have to pay in Social Security and self-employment taxes and why she owes those amounts.
Dana and Larry are married and live in Texas. Dana earns a salary of $45,000 and Larry has $25,000 of rental income from his separate property. If Dana and Larry file separate tax returns, what amount of income must Larry report? $0 $22,500 $25,000 $47,500 None of the above
Arthur and Cora are married and have 2 dependent children. They have a gross income of 95,000. Their allowable deductions for adjusted gross income total 4,000, and they have total allowable itemized deductions of 26,250. a. What is Arthur and Coras taxable income? b. What is Arthur and Coras income tax? c. If Arthur has 3,900 and Cora has 3,600 withheld from their paychecks, are they entitled to a refund, or do they owe additional taxes?
Sheila, a single taxpayer, is a retired computer executive with a taxable income of 100,000 in the current year. She receives 30,000 per year in tax-exempt municipal bond interest. Adam and Tanya are married and have no children. Adam and Tanyas 100,000 taxable income is comprised solely of wages they earn from their jobs. Calculate and compare the amount of tax Sheila pays with Adam and Tanyas tax. How well does the ability-to-pay concept work in this situation?
PERSONAL TAXES Joe and Jane Keller are a married couple who file a joint income tax return, where the tax rates are based on the tax tables presented in the chapter. Assume that their taxable income this year was 165,000. a. What is their federal tax liability? b. What is their marginal tax rate? c. What is their average tax rate?
Leroy and Amanda are married and have three dependent children. During the current year, they have the following income and expenses: Salaries 120,000 Interest income 45,000 Royalty income 27,000 Deductions for AGI 3,000 Deductions from AGI 9,000 a. What is Leroy and Amandas current year taxable income and income tax liability? b. Leroy and Amanda would like to lower their income tax. How much income tax will they save if they validly transfer 5,000 of the interest income to each of their children? Assume that the children have no other income and that they are entitled to a 1,050 standard deduction.
Arthur Wesson, an unmarried individual who is age 68, reports taxable income of 510,000 in 2019. He records positive AMT adjustments of 80,000 and preferences of 35,000. Arthur itemizes his deductions, and his regular tax liability in 2019 is 153,694. a. What is Arthurs AMT? b. What is the total amount of Arthurs tax liability? c. Draft a letter to Arthur explaining why he must pay more than the regular income tax liability. Arthurs address is 100 Colonels Way, Conway, SC 29526.
Bonnie is married and has one child. She owns Bonnies Rib Joint, which produces a taxable income of approximately 120,000 per year. a. Assume that Bonnies taxable income is 40,000 without considering the income from the rib joint. How much tax will she pay on the 120,000 of income from the rib joint? b. You work for the firm that prepares Bonnies tax return. Bonnie has asked the partner for whom you work to advise her on how she might lower her taxes. The partner has assigned you this task. Draft a memorandum to the partner that contains at least two options Bonnie could use to lower her taxes. For each option, explain the calculations that support the tax savings from your recommendation.
Ryan is 39 years old and works as a real estate agent. Ryans marginal tax rate is 24%. Ryan has a traditional (deductible) IRA with a current balance of 80,000. The IRA consists of 60,000 of contributions that Ryan made and deducted on his tax return and 20,000 of account earnings. In the current year, Ryan receives a distribution of the entire 80,000. He contributes 60,000 to a Roth IRA and keeps the remaining 20,000. What is Ryans total income tax and penalty on the transactions? a. 0 income tax, 0 penalty b. 20,000 income tax, 8,000 penalty c. 5,000 income tax, 2,000 penalty d. 19,200 income tax, 2,000 penalty

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Aida Hassen is single and earns $40,000 in taxable income. She uses the following tax rate schedule to calculate the taxes she owes. Up to $9,525 $9,525 - $38,700 $38,700 $82,500 $82,500 $157,500 What is Aida's marginal tax rate? Multiple Choice O 10% 24% 22% 12% 10% 128 228 248