1)

Tony and Liz Montey both work for XYZ Corporation where Tony earns $32,000 and Liz earns $31,000. However, XYZ Corporation does not have a retirement plan for their employees. Tony and Liz have three-year old twin daughters named Trisha and Tasha. The following is information related to their taxes for the current tax year:

Gross income	$63,000
Tony's Traditional IRA contribution	$1,000
Liz's Traditional IRA contribution	$2,000
Total itemized deductions	$16,200
Child Credit per child	$1,000
Personal exemptions	$3,950 each
Standard deduction	$12,400
Marginal tax rate	15 percent

NARREND

Refer to Figure 4-1. Approximately how much will Tony and Liz save in taxes as a result of their IRA contributions?

	a.	$3,000
	b.	$150
	c.	$1,000
	d.	$450

2)

Matt and Kat are in the 25 percent marginal income tax bracket and are subject to the 7.65 percent Social Security tax. If Kat gets a $750 bonus, approximately what percent of this bonus would she get to keep?

	a.	33 percent
	b.	59 percent
	c.	67 percent
	d.	100 percent