CAFF 223 Ch 4 HW

Brian makes ​$27,000 per year. How much can Brian expect to contribute to FICA taxes?

$2,065

Alys makes ​$450 per week. How much will be withheld from her weekly check total for Social Security​ & Medicare​ taxes- total FICA​ taxes? ​(Hint​: The Social Security tax rate is​ 6.20% and the Medicare tax rate is​ 1.45%.)

$34.43

Tracy is single, with all W-2 income, and had an adjusted gross income of ​$37,000. Tracy also has the following​ items: medical expenses $2,000 State income tax $1,850 Interest expense​ (first mortgage) $3,040 Interest expense​ (second mortgage) $1,200 Real estate tax $700 Interest expense—car loan $550 Interest expense—credit card $125 Gifts to charity $300 How much may Tracy claim as itemized​ deductions?

$7,090

Nick and Nora are married and has three children in college. They have an adjusted gross income of $47,400. If the standard deduction is ​$12,600​, itemized deductions are ​$14,200​, and they get an exemption of ​$4,000 for each adult and each​ dependent, what is their taxable​ income?

$13,200

Taxable income is calculated​ as:

All of the above are correct (gross adjusted income less the total exemptions; is equal to the adjusted gross income less the Standard Deduction; is equal to the adjusted gross income less the Itemized Deduction)

The difference between a tax deduction and a tax credit​ is:

a tax deduction reduces the amount of taxable​ income, while a tax credit directly reduces the amount of tax owed

Common types of tax credits​ include:

adoption credits and child credits

A standard deduction is:

fixed amount deducted from adjusted gross income to determine taxable income.

Adjusted gross income is determined by​ calculating:

gross income minus special adjustments such as contributions to traditional individual retirement accounts.