Joyce, a widow, lives in an apartment with her two minor children (ages 8 and 10), whom she supports. Joyce earns $33,000 during 2019. She uses the standard deduction and qualifies for head-of-household filing status.

a. Calculate the amount, if any, of Joyce's earned income credit.

b. During the year, Joyce is offered a new job that has greater future potential than her current job. If she accepts the job offer, her earnings for the year will be $39,000. Determine the increase or decrease in Joyce's net cash flow if she accepts the new job. Since the child tax credit will be the same under either scenario, you can ignore it for purposes of this analysis.

Keeps Old Job Takes New Job Tax calculation: Salary $33,000 $39,000 Less: standard deduction x 9,250 X 9,250 4,000 Taxable income $ 4,000 x Income tax 25,750 x Less: earned income credit Net tax due or refund After-tax cash flow: Salary $33,000 $39,000 Less: net tax due or add refund After-tax cash flow 36,281 x in cash flow if accept Net increase new job