Answer the following Essential Question: Mary Blackburn is a single parent with two children, Amy and...

Answer the following Essential Question: Mary Blackburn is a single parent with two children, Amy and Micah. She receives $300 weekly from WIC, a government welfare assistance program. Mary also works at the local supermarket Supremo, "off-the-books," receiving cash of $350 weekly. She believes that she should not pay any taxes because its like "snitching on herself" and that the government already collects their fair share of taxes from the Rich. Do you agree with Mary? Does she have an obligation to report and pay taxes on the money she receives?

Solutions

Expert Solution

Mary Blackburn is a single parent with two children, Amy and Michah.

Government doesn't differentiate the requirement to pay taxes based on the Social status of a person (rich or poor) but it depended that on earnings of the people.

As a person living in US, Mary Blackburn is liable to pay taxes as the annual income she earned has crossed the standard deduction of $18,000 (for single parent)

But she is eligible for certain deductions like Eligible Income Tax Resit (EITC), Child tax credit.

EITC maximum deduction is $5,828 (for 2 children and the earnings has not exceeded the upper limit of $46,703). It is also refundable

Child tax credit maximum deduction would be $4,000 ($2,000 per child), assuming the children are below 17 and are dependents. Refundable amount is limited to 1400 per child ($2,800 in total)

She has a liability to pay tax (without taking into account the credits available) so she has to report her income with the government (it is necessary even to claim any refund if exist)

Note: We are not asked to calculate the taxable amount of credit available

ekkarill92 answered 1 year ago

Next > < Previous

Related Solutions

5. Amy, who is thirty seven years old, is a single mother with two children. Amy...

5. Amy, who is thirty seven years old, is a single mother with two children. Amy is employed as a laboratory chemist with a national company. She is in good health. Her son Jimmy, age five, is an active and healthy boy. Lane, her daughter, is an inquisitive and healthy eight-year-old girl. Amy has come to you for advice about choosing the most appropriate health insurance plan for her family, as well as preparing for future health insurance issues. a....

Answer the following Essential Question: Amy, age 8, is a qualified dependent to her father John....

Answer the following Essential Question: Amy, age 8, is a qualified dependent to her father John. She received interest and dividends totaling $2,500 during 2019. What tax responsibilities, if any, does Amy have? Guiding Hints/Questions: - Are dependents required to file taxes if they have unearned income? - If so, how are their taxes determined? - does kiddie tax apply? - can someone be a dependent and still required to file taxes?

1. Joetta Hernandez is a single parent with two children and earns $36,000 a year. Her...

1. Joetta Hernandez is a single parent with two children and earns $36,000 a year. Her employer's group life insurance policy would pay 2.5 times her salary. She also has $48,000 saved in a 401(k) plan, $4,000 in mutual funds, and a $2,400 CD. She wants to purchase term life insurance for 15 years until her youngest child is self-supporting. She is not concerned about her outstanding mortgage, as the children would live with her sister in the event of...

Joetta Hernandez is a single parent with two children and earns $55,100 a year. Her employer's...

Joetta Hernandez is a single parent with two children and earns $55,100 a year. Her employer's group life insurance policy would pay 2.5 times her salary. She also has $73,467 saved in a 401(k) plan, $6,122 in mutual funds, and a $3,673 CD. She wants to purchase term life insurance for 15 years until her youngest child is self-supporting. She is not concerned about her outstanding mortgage, as the children would live with her sister in the event of Joetta's...

Joetta Hernandez is a single parent with two children and earns ?$37 comma 200 a year....

Joetta Hernandez is a single parent with two children and earns ?$37 comma 200 a year. Her? employer's group life insurance policy would pay 2.5 times her salary. She also has ?$49 comma 600 saved in a? 401(k) plan, ?$4 comma 133 in mutual? funds, and a ?$2 comma 480 CD. She wants to purchase term life insurance for 15 years until her youngest child is? self-supporting. She is not concerned about her outstanding? mortgage, as the children would live...

Joetta Hernandez is a single parent with two children and earns $45,600 a year. Her employer's...

Joetta Hernandez is a single parent with two children and earns $45,600 a year. Her employer's group life insurance policy would pay 2.5 times her salary. She also has $60,800 saved in a 401(k) plan, $5,067 in mutual funds, and a $3,040 CD. She wants to purchase term life insurance for 15 years until her youngest child is self-supporting. She is not concerned about her outstanding mortgage, as the children would live with her sister in the event of Joetta's...

Amy is Single mother with three dependent children, one age 11 and the other age 8...

Amy is Single mother with three dependent children, one age 11 and the other age 8 and 14. Her adjusted gross income for 2017 is $25,000 and she incurs qualified childcare expenses of $15,000, ( $5,000 for each child. ) A. What is the amount of Amy's qualified childcare expenses after any limitaiton? $________ B. Calculate the amount of Amy's childcare credit for 2017. $________

Ken and Amy Charvet have two children, ages 4 and 6. The Charvets want to start...

Ken and Amy Charvet have two children, ages 4 and 6. The Charvets want to start saving for their children’s education. Each child will spend 5 years at college and will begin at age 18. College currently costs $30,000 per year and is expected to increase at 7% per year. Assuming the Charvets can earn an annual compound investment return of 12% and inflation is 4%, how much must the Charvets deposit at the end of each year to pay...

Susan, age 35, is a single parent with two preschool children. She would like to purchase a traditional life insurance policy with a face amount of $1,000,000.

Susan, age 35, is a single parent with two preschool children. She would like to purchase a traditional life insurance policy with a face amount of $1,000,000. She is considering the following policies:1. Five-year renewable term insurance that is renewable until age 652. Ordinary life insurance3. Twenty-payment whole life insurance4. Life paid-up-at-age-65Required:a. Identify which of the above insurance policies require the highest and lowest current annual premium outlay, respectively. Justify with answer. b. If Susan has only a limited amount...

Answer the following Essential Question: What is the difference between Qualified Medical Expenses and deductible medical...

Answer the following Essential Question: What is the difference between Qualified Medical Expenses and deductible medical expenses? Guiding Hints/Questions: - are qualified medical expenses equal to the amount a taxpayer can claim on schedule A? - give an example of how qualified medical expenses will differ from the actual amount the taxpayer can deduct. - don't forget the limitations placed on medical expenses for 2019

Subjects