Matteo, who is single and has no dependents, was planning on spending the weekend repairing his car. On Friday, Matteo’s employer called and offered him

$500 in overtime pay if he would agree to work over the weekend. Matteo could get his car repaired over the weekend at Autofix for $400. If Matteo works over the weekend, he will have to pay the $400 to have his car repaired but he will earn $500. Assume Matteo pays tax at a flat 15 percent rate.

a) Strictly considering tax factors, should Matteo work or repair his car if the

$400 he must pay to have his car fixed is not deductible?

b) Strictly considering tax factors, should Matteo work or repair his car if the

$400 he must pay to have his car fixed is deductible for AGI?