Solved by verified expert:I have a few questions that need to be answered for my Federal Income tax class.
federal_income_tax_questions.docx
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1.Income Tax test two Questions
Is it possible for the United States to MAKE money by giving out money for these expensive credits?
a) Child and dependent care credit
b) Earned income credit
c) American Opportunity Credit
d) Lifetime Learning Credit
e) Retirement Contributions Credit
f) Adoption credit
2.Juan’s company said that company employees could put up to 15% of their salary into a 401(k) plan.
The company would match it dollar for dollar. Juan made $80,000 and he and his wife were in the 33%
tax bracket. The investment earned 8% a year. Jesse decided to save 15% on his own by putting the
money in the bank every month at 2% interest. After five years, how much did Juan have? How much
did Jesse have? Be sure to consider income tax in your calculations.
Question 3
1. Joan owns her own business and earns $45,000. Her husband Howard is a computer engineer
earning $200,000. Howard offered to do Joan’s computer work for free. Joan said, ” No,
Howard. I want to pay you $5000. We can save money on our income tax if we do that.” How
can they save money?
2. Mary had a business that had $2000 in sales. She bought a computer for $5000 and depreciated
it. The IRS disallowed the deduction. Why do you think they did that?
3. The IRS is not allowed to audit companies until their third year of business. Any guesses why
that is?
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