Mayra is single and a mom of a 2 year old child. Erin has net taxable income and salary of $45,000 making her a 22%marginal income tax payer. She spends $2,500 on child care expenses. Should Erin take the child care credit or put$2,500 in the FSA?O Child care credit by $60.O FSA by $241.OFSA by $50.They are the same.

The United States government offers the Child Care Credit as a tax credit to assist parents or…

Answered: Mayra is single and a mom of a 2 year…

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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1. Mary and Sue both work for WAWA. They both make $50,000 and they also each have $1000 a year in health care expenses. Mary deposits $1000 a year into a dependent care flexible spending account while Sue does not. They both have a tax rate of 15%. How much does Mary save vs. Sue in a given year?
Sue, aged 48 and Paul, aged 49 have two daughters- Leena aged 17 and Reena aged 15. Sue works as a part-time teacher in a secondary school and earns a $26,000 p.a. salary (plus minimum superannuation guarantee contribution).Paul works as a dentist and earns $145,000 (plus minimum superannuation guarantee contribution). Paul is anxious about their post-retirement financial situation. The couple has approached you for financial advice in respect of reducing the tax payable and their retirement planning. Superannuation Sue (20% Tax Free) 270,000 Sue’s Superannuation asset allocation Investment Asset Allocation Performance p.a. after tax Australian Share 50% 4% Cash & Fixed Interest 15% 1.4% International Shares 30% 10.80% Property 5% 3.10% Calculate the expected return for Sue’s superannuation portfolio using the return for the year ended 2022. Explain to Sue why her superannuation…
Roxy operates a dress shop in Arlington, Virginia. Lisa, a Maryland resident, comes in for a measurement and purchases a $2,800 dress. Lisa returns to Virginia a few weeks later to pick up the dress and drive it back to her Maryland residence, where she will use the dress. Assuming that Virginia's sales tax rate is 5 percent and that Maryland's sales tax rate is 6 percent, what is Roxy's sales tax collection obligation? Multiple Choice $0 $140 to Virginia $140 sales tax to Virginia and $28 use tax to Maryland $168 to Maryland
Tim and Martha paid $7,900 in qualified employment-related expenses for their three young children who live with them in their household. Martha received $1,800 of dependent care assistance from her employer, which was properly excluded from gross income. The couple had $56,500 of AGI earned equally. Use Child and Dependent Care Credit AGI schedule. Required: What amount of child and dependent care credit can they claim on their Form 1040? How would your answer differ (if at all) if the couple had AGI of $36,500 that was earned entirely by Martha?
Benny is supported by the people listed below. 19-year-old child 15-year-old child 67-year-old mother In 2021, how many of these dependents will be eligible for the $500 nonrefundable Other Dependents Credit?
Use the personal allowance table below. Personal Allowance Amount Single $2,000 Married 4,000 Each Dependent 2,000
Aliana & Alfonso have 4 children. Ricardo is 26, works full time, and lives in his own apartment. Maria is 20 and is a full-time college student supported by her parents. Eduardo is a 17-year-old high school student living at home. Isabella is a 6-month-old baby born in the current year. What is the total child tax credit amount they can take? A. $3,500 B. $6,000 C. $4,500 D. $3,000
Aa.43. Adrienne is a single mother with a six-year-old daughter who lived with her during the entire year. Adrienne paid $2,050 in child care expenses so that she would be able to work. Of this amount, $540 was paid to Adrienne’s mother, whom Adrienne cannot claim as a dependent. Adrienne had net earnings of $1,100 from her jewelry business. In addition, she received child support payments of $20,100 from her ex-husband. Use Child and Dependent Care Credit AGI schedule. Required: What amount, if any, of child and dependent care credit can Adrienne claim?
Alpesh
You are a dual-income, no-kids family. You and your spouse have the following debts: Mortgage = $261,000; Auto loan = $10,000; Credit card balance = $2,150; and other debts = $6,200. Further, you estimate that your funeral will cost $9,000. Your spouse expects to continue to work after your death. Using the DINK method, what should be your need for life insurance? Total insurance need $ 288,350
Sarah and Suzannah are friends who take turns babysitting each other's children every month or two. Jamie and Jenna are also friends who each own businesses. Jenna does Jamie's taxes each year in exchange for Jamie providing 10 hours of free consulting services to Jenna each year. Which of the following is true? a) Neither group of women has to recognize any income from these trades/exchanges b) Both groups of women have to recognize income from these trades/ exchanges c) Jamie and Jenna likely do not have to recognize any income from these exchanges but Sarah and Suzannah do d) Sarah and Suzannah likely do not have to recognize any income from these exchanges but Jamie and Jenna do
Robert and Maisie have one child, Gillie (4). Both parents work full time, and their AGI in 2020 was $194,375. During the year, they paid $8,140 in childcare expenses for Gillie. Robert's employer has decided to offer a daycare flexible spending account (FSA) option for 2021. What would you recommend, and why? I n the end, either option is a good choice because they both reduce their tax. They can claim $5,000 on the FSA and then claim the remaining $3,140 against the Child and Dependent Care Credit. Therefore, Robert should open the FSA. Because their marginal tax rate + FICA tax is more than the Child and Dependent Care Credit percentage they would receive, the FSA is a better option. Robert should not open the FSA; since he would only be able to fund up to $5,000, it wouldn't cover all their expenses.

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