Question
Chapter 3 Financial Planning Exercise 2 Estimating taxable income, tax liability, and potential refund Arabella Cunningham is 24 years old and single, lives in an
Chapter 3 Financial Planning Exercise 2 Estimating taxable income, tax liability, and potential refund Arabella Cunningham is 24 years old and single, lives in an apartment, and has no dependents. Last year she earned $42,200 as a sales representative for Planning Associates; $2,954 of her wages was withheld for federal income taxes. In addition, she had interest income of $151. The standard deduction in 2018 was $12,000 for single. The appropriate tax rate schedule is shown below:
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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