Question

1. Lacy is a single taxpayer. In 2017, her taxable income is $47,200. What is her tax liability in each of the following alternative situations? Use Tax Rate Schedule for reference. (Do not round intermediate calculations. Round your answer to 2 decimal places.)

a. All of her income is salary from her employer.

Tax liability: ____?____

2. In 2017, Carson is claimed as a dependent on his parent's tax return. His parents' ordinary income marginal tax rate is 28 percent. Carson's parents provided most of his support.

What is Carson's tax liability for the year in each of the following alternative circumstances? Use Tax Rate Schedule for reference.

a. Carson is 17 years old at year-end and earned $10,500 from his summer job and part-time job after school. This was his only source of income.

Tax liability: ____?____

4. In 2017, Elaine paid $2,960 of tuition and $1,040 for books for her dependent son to attend State University this past fall as a freshman. Elaine files a joint return with her husband.

What is the maximum American opportunity credit that Elaine can claim for the tuition payment and books in each of the following alternative situations? (Round your intermediate calculations to two decimal places and final answer to the nearest whole dollar amount. Leave no answer blank. Enter zero if applicable.)

a. Elaine’s AGI is $103,250.

American opportunity credit: ___?___

5. This year Lloyd, a single taxpayer, estimates that his tax liability will be $11,950. Last year, his total tax liability was $16,300.

He estimates that his tax withholding from his employer will be $9,035.

a. How much does Lloyd need to increase his withholding by (for the year), in order to avoid the underpayment penalty?

Increase in withholding: _____?___

Answer 1

a. All of her income is salary from her employer.
Tax Liability =
Single Taxable Income Tax Brackets and Rates, 2017
10%	$0 to $9,325	932.5
15%	$9,325 to $37,950	4293.75
25%	$37,950 to $91,900	2312.5
	Total Tax Liability	7538.75
2 a. Carson is 17 years old at year-end and earned $10,500 from his summer job and part-time job after school. This was his only source of income.
Gross Income =	10500
Less" Standard Deduction =	6350
Taxable Income	4150
Tax Liability	415
Tax rate of a single tax Payer
4 a. Elaine’s AGI is $103,250.
American opportunity credit:
Dependent Care Expenditure =	+2960+1040
	4000
Expenditure eligible for Credit =	3000
Credit Percentage Rate =	20%
American Opportunity Credit =	600