FIN 1103-3 FIN1103-3 Individual Week 3

FIN 1103-3 Individual Week 3

1. Mary Watson is 24 years old and single, lives in an apartment, and has no dependents. Last year she earned $ 45,000 as a sales assistant for Focused Business Analytics: $ 3,910 of her wages was withheld for federal income taxes. In addition, she had interest income of $142. Estimate her taxable income, tax liability, and tax refund or tax owed.

2. Debra Ferguson received the items and amounts of income shown in the chart to the right during 2011. Help her calculate (A) her gross income and (B) that portion (dollar amount) of her income that is tax exempt.

4. Use Worksheets 3.1 and 3.2. Qiang Gao graduated from college in 2011 and began work as a systems analyst in July of that year. He is preparing to file his income tax return for 2011 and has collected the financial information shown in the table below for that calendar year.

5. Demonstrate the differences resulting from a $ 1,000 tax credit versus a $ 1,000 tax deduction for a single taxpayer in the 25 percent tax bracket with $ 40,000 of pre-tax income.