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A, B, and C please In Year One, Dolly received $90,000 in salary and a $10,000 cash bonus from her employer. Dolly had no deduction
A, B, and C please
In Year One, Dolly received $90,000 in salary and a $10,000 cash bonus from her employer. Dolly had no deduction items for Year One, and the tax rate appli- cable in Year One was 25 percent. In Year Two, Dolly's employer discovered that a computational error accidentally inflated the amount of Dolly's Year One bonus. Dolly learned that the Year One bonus should have been $4,000. In Year Two, she repaid the $6,000 overpayment to the employer. Dolly received $90,000 in salary in Year Two and, again, had no other deductions for the year. The tax rate applicable in Year Two was 30 percent. (a) Ignoring the standard deduction, what is Dolly's federal income tax liability for Year Two? (b) How would your answer to (a) change if the applicable tax rate in Year One was 30 percent and the applicable tax rate in Year Two was 25 percent? (c) How vould your answer to (a) change if, instead of accepting repayment from Dolly, her employer simply withheld $6,000 from Dolly's Year Two salary? In Year One, Dolly received $90,000 in salary and a $10,000 cash bonus from her employer. Dolly had no deduction items for Year One, and the tax rate appli- cable in Year One was 25 percent. In Year Two, Dolly's employer discovered that a computational error accidentally inflated the amount of Dolly's Year One bonus. Dolly learned that the Year One bonus should have been $4,000. In Year Two, she repaid the $6,000 overpayment to the employer. Dolly received $90,000 in salary in Year Two and, again, had no other deductions for the year. The tax rate applicable in Year Two was 30 percent. (a) Ignoring the standard deduction, what is Dolly's federal income tax liability for Year Two? (b) How would your answer to (a) change if the applicable tax rate in Year One was 30 percent and the applicable tax rate in Year Two was 25 percent? (c) How vould your answer to (a) change if, instead of accepting repayment from Dolly, her employer simply withheld $6,000 from Dolly's Year Two salaryStep by Step Solution
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