Chapter 1

Group 2:

1.

A. Raising revenue to operate the government.

B. Providing incentives to business and economic goals, such as higher employment rates.

C. Providing incentives for certain social goals, such as charitable giving, by allowing tax deductions, exclusions, or credits for selected activities.

2.

A. Income = 41,500.00 – 5000.00 (deductions) = 36,500.00

B. They need to take the standard deduction of 12,200.00 due to it being higher than their itemized at 7,950.00

C. 36,500.00 – 12,200.00 = 24,300.00 – 7,800.00 (2 exemptions at 3,900.00) = 16,500.00 = Taxable income

3.

A. 23,000.00

B. 6,100.00

C. 23,000.00-6,100.00= 16,900.00-3,900.00 = 13,000.00 Taxable income

4.

A. 54,000.00+1,700.00-7,000.00= 48,700.00 adjusted gross income

B. Standard deduction of 6, 1000.00

C. Exemption = 3,900.00

D. 47,700.00-6,100.00=42,600.00-3,900.00 = 38,700.00 Taxable Income

5. Gross income – Deduction for adjusted gross income = Adjusted Gross Income – Greater of standard or itemized deductions – Exemptions = Taxable income

6.

A. 46,479.00+3,500.00-1,900.00 = 48,079.00 Adjusted gross income

B. 12,200.00 (standard is higher than 10,172.00)

C. 35,879.00 - – 7,800.00 (2 exemptions at 3,900.00) =28,079.00 taxable income

D. 1785.00 + (15% of 10,229.00) = 1785.00 + (1534.35) = 3319.35

7. 17400.00 -2250.00 =15150.00 -3900 =11250.00

11250.00 + (10% *2325.00) = 11250. +892.50 +(348.75) =12491.25

8. 13000.00 +1400.00 = 14400.00 -6100.00 =8300.00

8300.00 +(10% *8300.00) = 8300.00 +830.00 = 9130.00

9.

A. 45000.00-6100.00 =38900.00 – 3900.00 =35,000.00 taxable income

B. You are required to use the tax rate schedule

C. 35000.00 + 892.50 + (15% *26075.00) = 35000.00 +892.50 +3911.25 = 39803.75

10.

A. 50000.00+10000.+5000.+3000.00=68,000.00 gross income

B. 68000.00-3200.00 = 64800.00

C. 13000.00 itemized is higher

D. 5*3900.00 = 19500.00

E. 32300.00

F. 32300.00 +1785.00 + (15% *14450.00) =...