Nylas employer recently offered all employees a retirement savings account benefit With this benefit, Nyla can contribute a portion of her income (within limits) to her employer sponsored profit sharing retirement plan These contributions will reduce her current taxable income on a tax deferred basis Nyla wants to contribute 10 of her current annual income of $12,000 toward the retirement account But as a precautionary measure, she wants to know her investment's tax implication(s) before making any final decision Total income $18,015 Cashier income $12,000 Uber Lyft $6,000 Interest earnings (savings) $15 Retirement plan contributions $1,200 Total Tax withheld $600 Standard deduction $12,400 Qualified business income expenses (Uber Lyft) $275 American Opportunity tax credit (up to $2,500 per student and is available for education expenses from her first four years of higher education if her gross income is $80,000 or less) 2022 Federal Income Tax Brackets and Rates Tax rate Single 10 $0 to $9,875 12 $9,876 to $40,125 22 $40,126 to $85,525 24 $85,526 to $163,300 Use the information provided above to help Nyla determine her taxable income and her tax obligation for 2022 What are her 2022 marginal and average tax rates What tax strategies would you recommend to Nyla to help her reduce her tax liability or obligations Based on the information in this scenario, what new goal(s) would you add to her financial plan What is the difference between the marginal and the average income tax rates Identify the four (4) general strategies shared in your personal finance course Assume Nyla is in the 10 marginal tax rate, the 9 average tax rate, and her taxable income is $12,000 before receiving her annual bonus What will the following be if she receives a year end bonus of $1,000 1 Tax on the bonus 2 Average tax rate after the bonus 8 Nyla has $5,000 in medical expenses and an adjusted gross income of $10,800 If taxpayers are allowed to deduct the amount of medical expenses that exceed 10 percent of adjusted gross income, what would be the amount of the deduction Nyla can take

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Posted on Oct 23, 2024

Nylas employer recently offered all employees a retirement savings account benefit. With this benefit, Nyla can contribute a portion of her income (within limits) to her employer-sponsored profit-sharing retirement plan. These contributions will reduce her current taxable income on a tax-deferred basis. Nyla wants to contribute 10% of her current annual income of $12,000 toward the retirement account. But as a precautionary measure, she wants to know her investment's tax implication(s) before making any final decision.

Total income: $18,015
1. Cashier income: $12,000
2. Uber/Lyft: $6,000
3. Interest earnings (savings): $15
Retirement plan contributions: $1,200
Total Tax withheld: $600
Standard deduction: $12,400
Qualified business income expenses (Uber/Lyft): $275
American Opportunity tax credit (up to $2,500 per student and is available for education expenses from her first four years of higher education if her gross income is $80,000 or less)

2022 Federal Income Tax Brackets and Rates

Use the information provided above to help Nyla determine her taxable income and her tax obligation for 2022.
What are her 2022 marginal and average tax rates?
What tax strategies would you recommend to Nyla to help her reduce her tax liability or obligations?
Based on the information in this scenario, what new goal(s) would you add to her financial plan?
What is the difference between the marginal and the average income tax rates?
Identify the four (4) general strategies shared in your personal finance course
Assume Nyla is in the 10% marginal tax rate, the 9% average tax rate, and her taxable income is $12,000 before receiving her annual bonus. What will the following be if she receives a year-end bonus of $1,000?

1. Tax on the bonus

2. Average tax rate after the bonus

8. Nyla has $5,000 in medical expenses and an adjusted gross income of $10,800. If taxpayers are allowed to deduct the amount of medical expenses that exceed 10 percent of adjusted gross income, what would be the amount of the deduction Nyla can take?