GBS132 Lesson 3 Exercise – Personal and Family Financial Security

GBS132
Personal and Family Financial Security

Lesson 3: Exercise

1. Denise Smith is 24 years old and single, lives in an apartment, and has no dependents. Last year she earned $45,000 as a sales assistant for Custom Business Solutions: $3,910 of her wages was withheld for federal income taxes. In addition, she had interest income of $142. Estimate her taxable income, tax liability, and tax refund or tax owed.

a. What is her taxable income and explain how you got the answer.

b. What is her tax liability and explain how you got the answer.

c. What is her tax refund or tax owed and explain how you got the answer.

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Salary$33,500

Dividend800

Gift from mother500

Child support from ex-husband

3,600

Interest on savings account250

Rent900

Loan from bank2,000

Interest on state government bonds300

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2. Virginia Newman received the items and amounts of income shown above during 2010. Calculate her (a) gross income and (b) that portion (dollar amount) of her income that is tax exempt.

a. Calculate her gross income

b. Calculate that portion (dollar amount) of her income that is tax exempt.

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