Chapter 3 Financial Planning Exercise 2 Estimating taxable income, tax liability, and potential refund Charlotte Taylor is 24 years old and single, lives in an apartment, and has no dependents. Last year (2018) she earned $48,500 as a sales assistant for Office Furniture Rentals; $6,990 of her wages was withheld for federal income taxes. In addition, she had interest income of $235. The standard deduction in 2018 was $12,000 for single. Note that personal exemptions were suspended for 2018. Refer to Exhibit 3.3 for the appropriate tax rate schedule.

a. Estimate her taxable income. $

b. Estimate her tax liability.

Round the answer to the nearest cent. Use unrounded values in later calculations. (Hint: Use the tax rate schedules given in Exhibit 3.3 to determine her tax liability.) $

c. Estimate her tax refund or tax owed. Enter tax owed, if any, as negative amount. Round the answer to the nearest cent. $

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