Problems.Planning Your Tax Strategy PDF

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David Beausejour

Personal Financial Planning Problems/Planning Your Tax Strategy Page 1 of 2

1. If H and W are single and each have taxable income of $250,000, calculate their combined tax liabilities.

2.

If H and W are married and have taxable income of $500,000 on a joint return, calculate their tax liability. Compare your answer to #1. What is the “marriage penalty” tax, if any?

3.

If H and W are single and H has no income but W has taxable income of $500,000, calculate their combined tax liabilities. Compare your answer to #2. What is the “marriage penalty” tax, if any?

4. C, age 25, is not claimed as a dependent on H and W’s joint return. H and W transferred securities to C that generated $15,000 in nonqualified dividend income. The dividend income is C’s only income. H and W’s taxable income is $350,000. Calculate the income taxes saved by the family unit in transferring the securities to C.

David Beausejour

Personal Financial Planning Problems/Planning Your Tax Strategy Page 2 of 2

5. The following information is available for A: Wages Interest income IRA deduction Itemized deductions Child tax credit Federal income tax withheld

$50,000 1,000 5,500 10,000 1,000 8,000

A files as a head of household and has 2 exemptions. Calculate A’s tax liability after credits. What is A’s tax owed or refund due? Would you advise A to adjust her withholdings?...