2. Joe just received a $5,000 Christmas bonus from his employer on the first of December, bringing his total income up to $49,000 for the year. His marginal tax rate for federal income tax is 30%. His state income tax is 4% and the local income tax is 1%. The FICA tax rate is 8%. How much of the bonus will Joe have left over to spend on Christmas presents. That is, how much of that bonus does he get to keep?(No dollar signs, commas or decimals)

3. A single individual's tax liability is $21,987 on an income of $90,000. If he had won $1,000 in the state lottery, his tax liability would have risen to $22,337. What is his marginal tax rate? ______% (no percentage sign, one decimal point)

4. I saw a great looking T-shirt the other day at Abercrombie & Fitch in the Annapolis Mall. It was on the clearance rack for $120. I have an opportunity to earn some money at 7-11 over the next couple of weeks. I think I'll take advantage of it to buy this shirt. Sales tax in Maryland is 6%. My average federal income tax rate is 20%. My income tax rate for the state of Maryland is 4% and for Prince George's County is 1%. The FICA tax rate I'd have to pay is 6% How much income must I earn to buy the shirt? (No dollar sign, two decimal points)

5. For a given calendar year, your capital gains in one investment can be offset dollar for dollar with capital losses in some other investment. If your capital losses for the year exceed your capital gains, you have a net capital loss. However, the maximum net capital loss for a calendar year that can be deducted from you AGI, for tax purposes, is $3,000. TRUE OR FALSE

6. You can reduce your tax liability by claiming more deductions on your W4 form. TRUE OR FALSE

7. Which of the following is false? A good plan for reducing your taxable income for the current year would be to:

Buy a house

Invest in a "traditional" IRA

Max out your 401(k) plan.

Max out your Roth IRA.

8. Which of the following is not a regressive tax?

The federal tax on income

the FICA tax

A tax on food and medicine

A tax on necessities