Jacque Smith, an interior designer, is one-year shy of her thirtieth birthday.

She has come to you for help in preparing her taxed.

Use the information in the chapter, as well as the assumptions below, to answer the following questions:

• She is single;
• She has one child;
• She made $40,000 in wages last year;
• She earned $500 in taxable interests last year;
• Last year she received a $150 tax refund from the State of MA, where she is a resident;
• She paid $300 in student loan interest;
• She incurred $2,450 in medical expenses, $2,800 in state and property taxes, and made a $3,000 charitable donation to her church;
• She is thinking going to Suffolks Graduate School next year, which will cost $45,000; she has not yet started saving for this potential expense;
• She had $4,000 withheld from her pay for Federal Taxes

Questions:

1. How many personal exemptions may she claim?
2. What is Jacques filing status?
3. How much must she report on Line 7 on Form 1040 (Wages, salaries, etc.)
4. What is Jacques Total Income for the year?
5. What is Jacques AGI?
6. What deduction amount should Jacque claim?
7. How much taxable income must she report this year?
8. What marginal tax bracket does Jacque fall?
9. What is her tax liability for the year?
10. How much can Jacque claim in tax credits?
11. Is Jacque due a refund this year? Why or why not?