LO.10 Joyce, a widow, lives in an apartment with her two minor children (ages 8 and 10)

whom she supports. Joyce earns $33,000 during 2010. She uses the standard deduction.

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 would be $39,000; however, she is afraid she will not qualify for as much of the earned income credit.

Using after-tax cash-flow calculations, determine whether Joyce should accept the new job offer.