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Please answer 6 and 7. Thanks! 6. Joseph is married and will file a joint return with his wife for calendar year 2019. During 2019,
Please answer 6 and 7. Thanks!
6. Joseph is married and will file a joint return with his wife for calendar year 2019. During 2019, Joseph's wife did not work outside the home. Joseph is not covered by a qualified retirement plan at his job. The family's only gross income for the 2019 calendar year was from Joseph's salary. Assume the family's 2019 taxable income will be taxed at a 33% marginal tax rate. Joseph is going to make a $2,000 cash contribution to an Individual Retirement Account (IRA) for 2019. A contribution to an IRA qualifies as a deduction for (or toward) adjusted gross income. Indicate the tax savings that Joseph will have from this IRA contribution and the after-tax cost of this IRA contribution. Tax Savings $0 $ 660 After-tax Cost $2,000 $2,660 C. d. Tax Savings $1,340 $ 660 After-tax Cost $ 660 $1,340 b. 7. Would an individual and a taxable corporation prefer to pay a cost with pre-tax or after-tax dollars? Individual a. Pre-Tax Dollars b. Pre-Tax Dollars Corporation Pre-Tax Dollars After-Tax Dollars Individual C. After-Tax Dollars d. After-Tax Dollars Corporation Pre-Tax Dollars After-Tax DollarsStep by Step Solution
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