Chapter 4, Problem 3FPC

Summary Introduction

Case summary:Ms. J is an engineer and does well financially. She does a maximum contribution on behalf of her employer-sponsored retirement plan. She has got few ideas in reducing the income tax liability. The options consist of buying a home, creating a sideline business to sell her own art works, taking a tax-deductible job-hunting trip, starting master’s degree program in engineering or master’s in business administration to enhance her skills. She could manage to contribute $300 on a monthly basis to Roth IRA Account.

Characters in the case : Ms. J

Adequate information: Options of reducing the income tax liability consist of,

Buying a home

Creating a sideline business to sell her own art works

Taking a tax-deductible job-hunting trip

Starting master’s degree program in engineering or master’s in business administration to enhance her skills

Monthly contribution of $300 to Roth IRA Account

To determine: Effectively options to reduce the income tax liability.