The next three Parts are based on the table below which shows a payments schedule for a hypothetical negative income tax program. Family income Tax liability $2000 3000 4000 5000 - $3200 - 2800 - 2400 - 2000 A) Assuming that it is constant, what is the benefit reduction rate? (a) 25 percent (b) 40 percent (c) 50 percent (d) 60 percent (e) 75 percent B) What is the breakeven level of income? (a) $7,000 (b) $ 8,000 (c) $ 9,000 (d) $10,000 (e) $12,000 C)What is the "guarantee" or the after-tax income when pre-tax income is zero? (a) $3,000 (b) $3,500 (c) $4,000 (d) $4,500 (e) $5,000

The next three Parts are based on the table below which shows a payments schedule for a hypothetical negative income tax program. Family income Tax liability $2000 3000 4000 5000 - $3200 - 2800 - 2400 - 2000 A) Assuming that it is constant, what is the benefit reduction rate? (a) 25 percent (b) 40 percent (c) 50 percent (d) 60 percent (e) 75 percent B) What is the breakeven level of income? (a) $7,000 (b) $ 8,000 (c) $ 9,000 (d) $10,000 (e) $12,000 C)What is the "guarantee" or the after-tax income when pre-tax income is zero? (a) $3,000 (b) $3,500 (c) $4,000 (d) $4,500 (e) $5,000

CONCEPTS IN FED.TAX.,2020-W/ACCESS

20th Edition

ISBN:9780357110362

Author:Murphy

Publisher:Murphy

Chapter4: Income Exclusions

Section: Chapter Questions

Problem 20P

See similar textbooks

Similar questions

Which statement is NOT true about the structure of the Earned Income Tax Credit (EITC)? A. EITC payments decrease as earnings increase, but everyone qualifies for some amount. B. At a particular range of income, government reduces EITC payments based on a certain fixed percent of income earned. C. EITC pays a fixed amount at a range of income. D. Up to a threshold, EITC pays a certain fixed percent of wage earned.
In connection with the previous problem, suppose a certain governmentemployee earns a performance benefit = ₱2,340/month, 13 th Month Pay =₱15,780.43, and he has other benefits amounting to ₱6,000. How much of theadditional earnings will be taxed?
Use the the marginal tax information in the table below to calculate the after tax monthly income Greg should expect from his retirement income. Greg expects $18608 annually from CPP, $7708 annually from OAS, and $85,000 from his RRIF. Assume that his OAS will be clawed back on any income above $76,000. Simplified Marginal Tax Table Beginning of range End of range Tax at start of range Marginal rate - to 12,000 - 0% 12,000 to 20,000 - 15% 20,000 to 48,000 1,200 22% 48,000 to 95,000 7,360 30% 95,000 to 148,000 21,460 40% 148,000 to 210,000 42,660 45% 210,000 + above 70,560 50%
Quantitatively, what is the relationship between the AGI phase-out thresholds for the $2,000 child tax credit? ( don't hand writing solution)
According to a professional analysis of one proposed federal tax cut (by the accounting firm Deloitte and Touche), the cut would have resulted in the following income tax savings: a single person with a household income of $41,000 would save $211 in taxes; a single person with a household income of $530,000 would save $12,838 in taxes; a married couple with two children and a household income of $41,000 would save $1208 in taxes; and a married couple with two children and a household income of $530,000 would save $13,442 in taxes. Find the absolute difference in savings between a single person earning $41,000 and a single person earning $530,000. Then express the savings as a percentage of earnings for each person. Find the absolute difference in savings between a married couple with two children earning $41,000 and a married couple with two children earning $530,000. Then express the savings as a percentage of earnings for each couple. Write a paragraph either defending or…
What number of visits is required to provide you with an after-tax profit of $100,000? Tax is 30%, fixed costs are $257,500 and contributions costs per visit $34. My problem is where and how in to plugg in the 30% tax. Could you show me your answer including your 30% tax conversion.
Income Tax rates will be changed to the following Marginal Tax Rates given by: T(I) = 40*I2/ I2+1000 T is the tax rate given as a percentage I is the income of the person in THOUSANDS of dollars What is the Person who makes $20,000 top marginal tax rate? (round the nearest hundredth of a percent)
A company, based in the Midwest, requires an 8.000% after tax rate of return. The state tax rate is 5% and the company is in the 21% federal tax bracket.Using the combined incremental tax rate equation on p. 433 of the textbook and the after-tax rate of return equation on p. 439, what is the estimate of the before-tax rate ofreturn required.Give rate of return in percent to 3 decimal places like 10.134% or 9.765%
A tax credit of $100 for a person in a 24 percent tax bracket would reduce a person's taxes owed by: Group of answer choices $10. $28. $76. $100. $24.
The statutory marginal tax rate for income levels between $0 and $100,000 is 25%. The statutory marginal tax rate for income levels above $100,000 is 50%. A family with a child purchases 800 hours of childcare per year. The hourly rate for childcare was $10 in 2020. Families can deduct childcare expenditures up to $8,000. One spouse worked during the year while the other spouse did not earn income. The spouse that worked can claim a tax credit of $6,000. There is an inflation rate of 100% between 2020 and 2021. The family that earned $100,000 in 2020 earns $200,000 in 2021. The hourly wage of childcare also doubles to $20 in 2021. There is no change in income brackets used to calculate tax liabilities, tax credits, or deduction limits. What is the effective tax rate?
Caruso Company's SUTA rate for next year is 2.9% because its reserve ratio falls in its state's 8% to less than 10% category [(contributions – benefits paid) ÷ average payroll = $93,500 ÷ $971,500 = 9.62%]. If the next category (10% to less than 12%) would give Caruso a lower tax rate of 2.3%, what would be the amount of the voluntary contribution needed to get Caruso to that next category?
Suppose that the income tax in a certain nationis computed as a flat rate of 5 percent, but notax is levied above $50,000 in taxable income.Taxable income, in turn, is computed as theindividual's income minus $10,000; that is,everyone gets a $10,000 deduction. What arethe marginal and average tax rates for each ofthe following three workers? (Evaluate the mar-ginal tax rate at each person's current incomelevel.)a.A part-time worker with annual income of$9,000.b.A retail salesperson with annual income of$45,000.C.An advertising executive with annual incomeof $600,000.Is the tax progressive, proportional, or regres-sive with respect to income?