Joyce, a single parent, lives in an apartment with her two minor children (ages 8 and 10), whom she supports. Joyce earns $33,000 during 2023. She uses the standard deduction and files as a head of household. Round all computations to the nearest dollar. Click to access Earned Income Credit and Phaseout Percentages Table and the Tax Rates Schedules. a. Calculate the amount, if any, of Joyce's earned income credit. 2,696 X b. During the year, Joyce is offered a new job that has greater future potential than her current job. If she accepts the job offer, her earnings for the year will be $40,400; however, she is afraid she will not qualify for the earned income credit. Determine the increase or decrease in Joyce's net cash flow if she accepts the new job. Since the child tax credit will be the same under either scenario, you can ignore it for purposes of this analysis. Use the Tax Rate Schedule when computing her income tax. Tax calculation: Salary Less: Standard deduction Taxable income Income tax Less: Earned income credit Net tax due or refund After-tax cash flow: Salary Less: Net tax due or Add refund After-tax cash flow Net in cash flow if accept new job ta Keeps Old Job $33,000 13,850 X Takes New Job $40,400 $33,000 $40,400

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
icon
Related questions
Question
Joyce, a single parent, lives in an apartment with her two minor children (ages 8 and 10), whom she supports. Joyce earns $33,000 during
2023. She uses the standard deduction and files as a head of household.
Round all computations to the nearest dollar.
Click to access Earned Income Credit and Phaseout Percentages Table and the Tax Rates Schedules.
a. Calculate the amount, if any, of Joyce's earned income credit.
2,696 X
b. During the year, Joyce is offered a new job that has greater future potential than her current job. If she accepts the job offer, her
earnings for the year will be $40,400; however, she is afraid she will not qualify for the earned income credit. Determine the increase or
decrease in Joyce's net cash flow if she accepts the new job. Since the child tax credit will be the same under either scenario, you can
ignore it for purposes of this analysis. Use the Tax Rate Schedule when computing her income tax.
Tax calculation:
Salary
Less: Standard deduction
Taxable income
Income tax
Less: Earned income credit
Net tax due or refund
After-tax cash flow:
Salary
Less: Net tax due or Add refund
After-tax cash flow
Net
in cash flow
if accept new job
ta
Keeps
Old Job
$33,000
13,850 X
Takes
New Job
$40,400
$33,000
$40,400
Transcribed Image Text:Joyce, a single parent, lives in an apartment with her two minor children (ages 8 and 10), whom she supports. Joyce earns $33,000 during 2023. She uses the standard deduction and files as a head of household. Round all computations to the nearest dollar. Click to access Earned Income Credit and Phaseout Percentages Table and the Tax Rates Schedules. a. Calculate the amount, if any, of Joyce's earned income credit. 2,696 X b. During the year, Joyce is offered a new job that has greater future potential than her current job. If she accepts the job offer, her earnings for the year will be $40,400; however, she is afraid she will not qualify for the earned income credit. Determine the increase or decrease in Joyce's net cash flow if she accepts the new job. Since the child tax credit will be the same under either scenario, you can ignore it for purposes of this analysis. Use the Tax Rate Schedule when computing her income tax. Tax calculation: Salary Less: Standard deduction Taxable income Income tax Less: Earned income credit Net tax due or refund After-tax cash flow: Salary Less: Net tax due or Add refund After-tax cash flow Net in cash flow if accept new job ta Keeps Old Job $33,000 13,850 X Takes New Job $40,400 $33,000 $40,400
Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 2 steps

Blurred answer
Similar questions
  • SEE MORE QUESTIONS
Recommended textbooks for you
FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
Accounting
ISBN:
9781259964947
Author:
Libby
Publisher:
MCG
Accounting
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education