Explain and calculate the differences resulting from a $2,000 tax credit versus a $2,000 tax deduction for a single taxpayer with $40,000 of pre-tax income. The standard deduction in 2018 was $12,000 for single. Note that personal exemptions were suspended for 2018. Use Exhibit 3.3 to determine the corresponding tax rate. Round the answers to the nearest cent. After-tax Income (Tax Deduction) $ After-tax Income (Tax Credit)
Explain and calculate the differences resulting from a $2,000 tax credit versus a $2,000 tax deduction for a single taxpayer with $40,000 of pre-tax income. The standard deduction in 2018 was $12,000 for single. Note that personal exemptions were suspended for 2018. Use Exhibit 3.3 to determine the corresponding tax rate. Round the answers to the nearest cent. After-tax Income (Tax Deduction) $ After-tax Income (Tax Credit)
Chapter1: Federal Income Taxation—an Overview
Section: Chapter Questions
Problem 67IIP
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Explain and calculate the differences resulting from a $2,000 tax credit versus a $2,000 tax deduction for a single taxpayer with $40,000 of pre-tax income. The standard deduction in 2018 was $12,000 for single. Note that personal exemptions were suspended for 2018. Use Exhibit 3.3 to determine the corresponding tax rate. Round the answers to the nearest cent.
| After-tax Income (Tax Deduction) |
$
|
| After-tax Income (Tax Credit) |
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