PF: Calculating Income Tax

What is Jane's gross income?

Will Jane take the standard deduction of $12,550 or the itemized deduction of $11,000?

• Jane will take the standard deduction of $12,550.

• Jane will take the itemized deduction of $11,000.

• Jane will take both deductions.

• Jane will not take any deductions.

What is Jane's taxable income if she was given the standard deduction of $12,550 or the itemized deduction of $11,000?

How much does Jane owe in taxes?

What is Jane's marginal tax rate?

What is Jane's effective tax rate? Round to the nearest hundredth of a percent.

How much money in federal taxes were withheld on the W-2?

Does Jane owe or does she get a refund?

• Owes $2720

• Gets a Refund of $2720

• Owes $4115

• Get a Refund $6835

Which of the following is true about federal income tax?

• It is the only tax you will pay on your wages, salary, and tips

• It primarily funds Medicare and Social Security

• It is a tax you pay based on the value of your home

• It is a progressive tax that depends on your income level

A W-2 is…

• Issued by an employer at the end of the year to detail how much the employee paid and how much taxes were withheld

• Issued by a business to an independent contractor to detail how much money was paid for contracted work

• Issued by financial institutions to detail how much interest was accrued during the tax year

• Issued by an college or university to detail how much tuition was paid during the tax year