Jane, who is expecting to finish college in May 2017, is fortunate to have already arranged full-time employment after graduation. She will begin work on July 1, 2017, as a staff accountant at a nearby professional services firm with a starting salary of $48,600 per year. Jane is married to Craig, who plans to be a full-time student throughout the year. They anticipate generating no income for the year other than the salary from her new position.

a. Indicate whether Jane may claim withholding allowances on her Form W4 for each of the following.

	Herself
	Her husband
	A special withholding allowance
	An additional allowance for head-of-household status

b. Assuming that Jane and Craig use the standard deduction, file a joint return, and are in the 10% tax bracket. Calculate the Federal income tax liability on their projected taxable income for 2017 (based on her working only half of the year).

When required, round amounts to the nearest dollar.

Jane and Craig's projected liability is $.

To correct any over- or underwithholding for the current year, Jane and Craig should strive to have an amount withheld from Jane's monthly salary of approximately $. She should talk to her employer and modify her W4 (increasing her allowances) so that her withholdings will approximate $ per month.

c. Assume that Jane modified her W4 in 2017 based on the projected income tax in the previous section. Complete the statement below regarding 2018 changes she should make, knowing that Craig will be a full-time student throughout 2018.

Jane should submit a new W-4 to her employer at the beginning of the next year with withholding allowances.