Chapter 3 Financial Planning Problems

Matthew Ramirez

BNF-102-098WB

Prof. Deane

4 February 2022

1. Daniel Simmons arrived at the following tax information:

Gross salary, $62,250 Interest Earnings $75

Dividend income $140 Adjustments to income, $850

What amount would Daniel report as taxable income?

6. Noor Patel has had a busy year! She decided to take a cross-country adventure. Along the way, she won a new car on “The Price Is Right” (valued at $15,000) and won $500 on a scratch-off lottery ticket (the first time she ever played). She also signed up for a credit card to start the trip and was given a sign-up bonus of $100. How much of these will she have to include in her federal taxable income?

7. Using the tax table on page 81, determine the amount of taxes for the following situations:

a. A head of household with taxable income of $55,000.

b. A single person with taxable income of $35,000.

c. Married taxpayers filing jointly with taxable income of $72,000.

9. Using the tax table in Exhibit 3–5 , determine the amount of taxes for the following situations:

a. A head of household with taxable income of $89,525.

b. A single person with taxable income of $89,001

c. A married person filing a separate return with taxable income of $89,365.

11. Julia Sims has $30,000 of adjusted gross income and $5,000 of medical expenses. She expects to itemize her tax deductions this year. The most recent tax year has a medical expenses floor of 10 percent. How much of a tax deduction for medical expenses will Julia be able to take?

15. Reginald Sims deposits $5,500 each year in a tax-deferred retirement account. If he is in a 22 percent tax bracket, by what amount would his tax be reduced over a 20-year time period?