Questions

1.) Jamie Lee is trying to decide whether to use Form 1040EZ and Form 1040A to file her federal income tax return. Using the Financial Literacy in Practice feature in this chapter, choose the most appropriate federal tax filing form for Jamie to use and describe your reasoning for making this choice.

2.)What impact on Jamie Lees income will the gift of $1,000 from her great aunt have on her adjusted gross income? Will there be an impact on the adjusted gross income with her $2,000 raffle prize winnings? Explain your answer.

3.)Using Exhibit 31 as a guide, calculate Jamie Lees adjusted gross income amount by completing the table below:

Gross income

() Adjustments to income

= Adjusted gross income

4.)What would Jamie Lees filing status be considered?

5.) Jamie Lee has a marginal tax rate of 15 percent and an average tax rate of 11 percent. Explain why there is a difference between the two rates.

FINANCIAL SERVICES: SAVINGS PLANS AND ACCOUNTS regyar savings acsouct aher paying off her credit card balance. Current Financial Situation Assets: Checking actount $2,250 Skvings account; $6,900 (inteiest earnod ikst year $125 ) Emernency fund savings ascount, $3,900 (interes eamed last year; \$75) IAA talance, $350 i\$300 cortrbution made last yean) Gar, 5,,000 Liabilities: Studert loan; $10.890 Credi caid basance, 50 (interest paid last year: 358 ) Income: Geose moritivy salary, $7550 Manthy Expenses: Fent dologson, site vienes cbligatice. 5 tas Food, 5100 Gasmaitianance 5110 Ciedt card caymant, No 5avinget Reguier savings incethir deposs. $175 feiry day cwinge mort dy deposht, 126 Enferiainment: Ceke ecceraino ciass, 440 Mpves elth triends 409