MCGRAW-HILL'S TAX.OF INDIV.+BUS.2020
20th Edition
ISBN: 9781259969614
Author: SPILKER
Publisher: MCG
expand_more
expand_more
format_list_bulleted
Question
Chapter 9, Problem 56P
a.
To determine
Determine the estimated amount of tax savings for Person N , if Person N postpones the mailing of bills of December till January 1 of next year.
b.
To determine
Explain the impact of time value of money on the calculations.
c.
To determine
Explain whether the strategy of tax saving will lead to any additional risk in business.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
Ruth has asked for help in determining whether she should receive her $32,500 bonus check
in the current year or next year. In the current year, her marginal tax rate is 24% and she
anticipates she will be in the 32% marginal tax bracket next year. What advice can you give
Ruth?
Net revenue from bonus $
Current year
Ruth should choose to receive her bonus in the
✓year.
Next year
Mark makes $82,420 per year and pays about 23% of his gross monthly income in federal and state taxes. He wants to find an apartment to rent. Estimate how much he can afford to pay for rent each month. Then determine how much money he will have after taxes and rent are paid
Helen Meyer receives a travel allowance of $160 each week from her company for time away from home. If this allowance is taxable
and she has a 15 percent income tax rate, what amount will she have to pay in taxes for this employee benefit annually? (Round your
final answer to 2 decimal places.)
Annual tax amount
Chapter 9 Solutions
MCGRAW-HILL'S TAX.OF INDIV.+BUS.2020
Knowledge Booster
Similar questions
- Fred, a self-employed taxpayer, travels from Denver to Miami primarily on business. He spends five days conducting business and two days sightseeing. His expenses are 400 (airfare), 150 per day (meals), and 300 per night (lodging). What are Freds deductible expenses?arrow_forwardMichelle, age 54, it's self-employed and has never made a lot of money. But, she is consistently saved 3864 per year into a traditional IRA. Over the years, she's taking full advantage of the tax law and deducted each year's contribution from her tax return. If Michelle started saving age 25 and has earned an average annual rate of 4% how much is the account worth today? 204,662 19,751 645,875 44,630arrow_forwardBob owns a restaurant. The average price per order is $15 and the average variable cost per order is $9. The restaurant remains open 6 days a week for 50 weeks per year. The rent, utilities and other related expenses are $8,000 per month. Bob pays $3,000 per month to his only employee in the restaurant. Bob also spends $12,000 every year for renovation and maintenance. If Bob wants to earn a before tax profit of $8,000 per month, what should be the daily sales (in dollars) in the restaurant?arrow_forward
- Alex makes $80,000 per year and pays about 30% of his gross monthly income in federal and state taxes. He wants to rent an apartment and pay no more than 25% of his income for rent. what is the maximum rent he can afford per month?arrow_forwardJing is concerned about having to repay her Old Age Security (OAS) pension that she receives. This is very stressful as she is on a very limited budget. She knows that if her income is over the minimum threshold amount, that she must repay 15% of this different through her tax return due to the OAS clawback. The maximum monthly OAS pension in 2021 is $635.26. Jing’s net income is estimated at $75,000 for the year. Jing turned 65 years old on January 1, 2021 and has been living in Canada for 25 years. She knows that the amount she will receive is a partial monthly pension earned at the rate of 1/40th of the maximum monthly OAS pension for each year of residence in Canada after the age of 18.arrow_forwardDianne earns 19,600 per year. Her employer deducts 2,800 per year for income and social security taxes. How much money does she have for other expenses each month?arrow_forward
- Felicity is 50 years old and earns $115,000 per year. She saves 12% of her annual gross income for retirement. Felicity will pay off her mortgage by the time she retires. Her monthly payment is $1,950.21. The current FICA payroll tax rate is 7.65%. Calculate her wage replacement ratio using the top-down approach (round to the nearest %) and using pre-tax dollars. Assume that she wants to maintain her lifestyle, so no other changes in expenditures. (Hint: Top-down approach starts with current income and subtracts off expenses that will go away in retirement. The new number divided by the current income is the wage replacement ratio). A. 80% B. 68% C. 88% D. 60%arrow_forwardLuna, a self-employed accountant, currently earns $100,000 annually. Luna has been able to save 18% of her annual Schedule C net income. Assume that Luna paid $11,000 in Social Security taxes, and that she plans to pay off her mortgage at retirement, thereby relieving her of her only debt. Luna presently pays $1,500 per month toward the mortgage principal and interest. Based on the information provided herein, what do you expect Luna's wage replacement ratio to be at retirement? Question 2 options: a. 49% b. 53% c. 59% d. 63%arrow_forwardJessica makes $24,000 a year, but receives weekly paychecks. If 12% of her checks is withheld for federal taxes,what is her required weekly deduction including FICA?arrow_forward
arrow_back_ios
arrow_forward_ios
Recommended textbooks for you
Individual Income TaxesAccountingISBN:9780357109731Author:HoffmanPublisher:CENGAGE LEARNING - CONSIGNMENT
Individual Income Taxes
Accounting
ISBN:9780357109731
Author:Hoffman
Publisher:CENGAGE LEARNING - CONSIGNMENT