Tax Planning Dan plans to reduce his work schedule and work only half-time for W333 in 2017. He has been writing songs for several years and wants to devote more time to developing a career as a songwriter. Because of the uncertainty in the music business, however, he would like you to make all computations assuming that he will have no income from songwriting in 2017. To make up for the loss of income, Freida plans to increase the amount of time she spends selling real estate. She estimates that she will be able to earn $90,000 in 2017. Assume that all other income and expense items will be approximately the same as they were in 2016. Assume that Sam will be enrolled in college as a full-time student for the summer and fall semesters. Gina and Sam will continue to qualify as dependents. Assume a personal exemption amount of $4,050 for 2017. The $3,100 commission received on January 10, 2017, is included in the $90,000 income to be earned by Freida in 2017 The 25% 2016 marginal tax rate remains the same in 2017. Interest income, dividend income, partnership income, and itemized deductions are the same for 2017. Complete the following paragraph regarding whether the Butlers will have more or less disposable income (after Federal income tax) in 2017 There will be a net Kentucky income tax, Social Security tax, and Medicare tax V . The net reduction in the Butler's aftertax cash flow will be approximately $21,200 reduction in salary and wages which will also result in a decrease the Feedback Tax Planning Dan plans to reduce his work schedule and work only half-time for W333 in 2017. He has been writing songs for several years and wants to devote more time to developing a career as a songwriter. Because of the uncertainty in the music business, however, he would like you to make all computations assuming that he will have no income from songwriting in 2017. To make up for the loss of income, Freida plans to increase the amount of time she spends selling real estate. She estimates that she will be able to earn $90,000 in 2017. Assume that all other income and expense items will be approximately the same as they were in 2016. Assume that Sam will be enrolled in college as a full-time student for the summer and fall semesters. Gina and Sam will continue to qualify as dependents. Assume a personal exemption amount of $4,050 for 2017. The $3,100 commission received on January 10, 2017, is included in the $90,000 income to be earned by Freida in 2017 The 25% 2016 marginal tax rate remains the same in 2017. Interest income, dividend income, partnership income, and itemized deductions are the same for 2017. Complete the following paragraph regarding whether the Butlers will have more or less disposable income (after Federal income tax) in 2017 There will be a net Kentucky income tax, Social Security tax, and Medicare tax V . The net reduction in the Butler's aftertax cash flow will be approximately $21,200 reduction in salary and wages which will also result in a decrease the Feedback
