(a) Erica is 25 years old and her filing status is head of household. She has two children who are her dependents. She contributed $5,000 to a 401(k) during the year. Her AGI is $37,000. Her tax liability, before considering any potential tax credits, is $100.
(a) Erica is 25 years old and her filing status is head of household. She has two children who are her dependents. She contributed $5,000 to a 401(k) during the year. Her AGI is $37,000. Her tax liability, before considering any potential tax credits, is $100.
Chapter14: Taxes On The Financial Statements
Section: Chapter Questions
Problem 21CE
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Question
Transcribed Image Text:Please use the tables below to help you calculate 2023 tax liability (or refund) in each of the
following independent scenarios. Please assume that a taxpayer who is eligible for the
Earned Income Tax Credit will be able to take the maximum credit amount, even if the
taxpayer's AGI puts her in the phaseout range. In other words, for purposes of this
problem only, a taxpayer is either not eligible for the credit or eligible for the maximum
credit. Also, please use only the two credits below in your calculation.
No. of
Children
0
1
2
3 or more
Credit Rate
50% of your
contribution
20% of your
contribution
10% of your
contribution
0% of your
contribution
Earned Income Credit (for Single Taxpayers & Head of Household)
Tax Year 2023
Maximum Credit
Income at Max
Credit
$7,840
$11,750
Married Filing
Jointly
AGI not more than
$43,500
$43,501 - $47,500
$47,501 - $73,000
more than $73,000
$600
$3,995
$6,604
$7,430
Taxpayers with investment income of more than $11,000 are not eligible for the credit.
* Phaseout based on the greater of earned income or AGI. Increase by $6,570 for joint return filers.
** Phascout based on the greater of earned income or AGI. Increase by $6,560 for joint return filers.
$16,510
$16,510
Saver's Credit 2023
Phaseout Begins
$9,800*
$21,560**
$21,560**
$21,560**
Head of Household
AGI not more than
$32,625
$32,626-$35,625
$35,626-$54,750
more than $54,750
Phaseout Ends
$17,640*
$46,560**
$52,918**
$56,838**
Single & Married
Separate
AGI not more than
$21,750
$21,751 - $23,750
$23,751 - $36,500
more
ore than $36,500
(a) Erica is 25 years old and her filing status is head of household. She has two children who
are her dependents. She contributed $5,000 to a 401(k) during the year. Her AGI is
$37,000. Her tax liability, before considering any potential tax credits, is $100.
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