Enrico and his wife have combined salaries of $85,000. They have interest and dividends on their investments of $1,000 and annually contribute a combined $3,000 to a traditional IRA
The interest on their home mortgage is $2,500, they contributed $1,000 to their church, and incurred medical expenses not covered by insurance of $1,800. Assuming they can claim two personal exemptions of $4,000 each and file joint tax returns, compute their tax liability for 2015.
A) $11,606
B) $10,056
C) $9,981
D) $8,287
Answer: D
Explanation: D)
Salary $85,000
Interest and dividends $1,000
Gross income $86,000
Less IRA contributions $3,000
AGI $83,000
Less standard deduction $11,900 (greater than itemized deductions of $3,500)
Less exemptions (2) $7,600
Taxable income $63,500
Exhibit 4.6, panel B - $1,740 + 15%($63,500 - $17,400) = $8,655
You might also like to view...
An employer has refused a new employee’s request for a specific accommodation for his religious practice at work because it would cause undue hardship. Which of the following explanations would justify this from a legal standpoint?
a. The accommodation costs about $60 to set up. b. A number of customers remark directly about their discomfort with the accommodation. c. The accommodation causes a significant reduction in work productivity for the employee’s department. d. The accommodation makes several other employees uncomfortable.
Bills of lading serve each of the following purposes except
A. a receipt from the carrier for goods shipped. B. a receipt from the buyer for goods received. C. a certificate of ownership. D. a contract for carriage between the shipper and the carrier.
Employees of Mega Corp have gone out on strike seeking better pay. Mega Corp announces that if the union does not end the strike it will begin hiring replacement workers. Which statement is correct?
a. Hiring replacement workers during a strike is an unfair labor practice. b. Mega Corp can only hire replacement workers if the collective bargaining agreement expressly gives the company the right to do so. c. Mega Corp can only hire replacement workers if it gives the union 14 days' notice prior to actually bringing in the replacement employees. d. Mega Corp can hire replacement workers at any time during a strike.
A firm is considering two location alternatives. At location A, fixed costs would be $4,000,000 per year, and variable costs $0.30 per unit. At alternative B, fixed costs would be $3,600,000 per year, with variable costs of $0.35 per unit
If annual demand is expected to be 10 million units, which plant offers the lowest total cost? A) Plant A, because it is cheaper than Plant B for all volumes over 8,000,000 units. B) Plant B, because it is cheaper than Plant A for all volumes over 8,000,000 units. C) Plant A, because it is cheaper than Plant B for all volumes. D) Plant B, because it has the lower variable cost per unit. E) Neither Plant A nor Plant B, because the crossover point is at 10 million units.