Joyce, a single parent, lives in an apartment with her two minor children (ages 8 and 10), whom she supports. Joyce earns $33,000 during 2023. She uses the standard deduction and files as a head of household. Round all computations to the nearest dollar. Click to access Earned Income Credit and Phaseout Percentages Table and the Tax Rates Schedules. a. Calculate the amount, if any, of Joyce's earned income credit. 3,646 X Feedback Check My Work b. During the year, Joyce is offered a new job that has greater future potential than her current job. If she accepts the job offer, her earnings for the year will be $40,400; however, she is afraid she will not qualify for the earned income credit. Determine the increase or decrease in Joyce's net cash flow if she accepts the new job. Since the child tax credit will be the same under either scenario, you can ignore it for purposes of this analysis. Use the Tax Rate Schedule when computing her income tax. Keeps Old Job Takes New Job Tax calculation: Salary $33,000 $40,400 Less: Standard deduction 20,800 20,800 Taxable income 12,200 19,600 Income tax 1,220 2,038 X X Less: Earned income credit Net tax due or refund After-tax cash flow: Salary Less: Net tax due or Add refund After-tax cash flow x X $33,000 $40,400 Net increase in cash flow if x accept new job
Joyce, a single parent, lives in an apartment with her two minor children (ages 8 and 10), whom she supports. Joyce earns $33,000 during 2023. She uses the standard deduction and files as a head of household. Round all computations to the nearest dollar. Click to access Earned Income Credit and Phaseout Percentages Table and the Tax Rates Schedules. a. Calculate the amount, if any, of Joyce's earned income credit. 3,646 X Feedback Check My Work b. During the year, Joyce is offered a new job that has greater future potential than her current job. If she accepts the job offer, her earnings for the year will be $40,400; however, she is afraid she will not qualify for the earned income credit. Determine the increase or decrease in Joyce's net cash flow if she accepts the new job. Since the child tax credit will be the same under either scenario, you can ignore it for purposes of this analysis. Use the Tax Rate Schedule when computing her income tax. Keeps Old Job Takes New Job Tax calculation: Salary $33,000 $40,400 Less: Standard deduction 20,800 20,800 Taxable income 12,200 19,600 Income tax 1,220 2,038 X X Less: Earned income credit Net tax due or refund After-tax cash flow: Salary Less: Net tax due or Add refund After-tax cash flow x X $33,000 $40,400 Net increase in cash flow if x accept new job
Chapter3: Income Sources
Section: Chapter Questions
Problem 58P
Related questions
Question
None
Transcribed Image Text:Joyce, a single parent, lives in an apartment with her two minor children (ages 8 and 10), whom she supports. Joyce earns $33,000 during
2023. She uses the standard deduction and files as a head of household.
Round all computations to the nearest dollar.
Click to access Earned Income Credit and Phaseout Percentages Table and the Tax Rates Schedules.
a. Calculate the amount, if any, of Joyce's earned income credit.
3,646 X
Feedback
Check My Work
b. During the year, Joyce is offered a new job that has greater future potential than her current job. If she accepts the job offer, her
earnings for the year will be $40,400; however, she is afraid she will not qualify for the earned income credit. Determine the increase or
decrease in Joyce's net cash flow if she accepts the new job. Since the child tax credit will be the same under either scenario, you can
ignore it for purposes of this analysis. Use the Tax Rate Schedule when computing her income tax.
Keeps
Old Job
Takes
New Job
Tax calculation:
Salary
$33,000
$40,400
Less: Standard deduction
20,800
20,800
Taxable income
12,200
19,600
Income tax
1,220
2,038
X
X
Less: Earned income credit
Net tax due or refund
After-tax cash flow:
Salary
Less: Net tax due or Add refund
After-tax cash flow
x
X
$33,000
$40,400
Net increase
in cash flow if
x
accept new job
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
Recommended textbooks for you
Individual Income Taxes
Accounting
ISBN:
9780357109731
Author:
Hoffman
Publisher:
CENGAGE LEARNING - CONSIGNMENT