Nora and Vanessa are married and have 2 dependent children. This is a summary of their 2021 tax return:

a. Assuming thatNora and Vanessa's 2021 adjusted gross income will increase at the 2.5% rate of inflation and that the standard deduction amount does not change, calculate their 2022 taxable income. Calculate the tax liability on this income using the 2021 tax rate schedules.

b. Calculate Nora and Vanessa's projected 2022 taxable income and tax liability, assuming that their adjusted gross income will increase by 2.5% and that all other inflation adjustments are made. Compare these calculations with those in part a and explain how the inflation adjustments preserve Nora and Vanessa's after-tax income.

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Adjusted gross income Deductions from adjusted gross income: Standard deduction Taxable income Tax liability $107,837 (25,100) $ 82,737 $9,699