Your friend is a higher rate taxpayer and has a large amount in a savings account which is earning 3% interest. He is worried that he will exceed the £500 of interest that he can earn free of tax as a higher rate taxpayer. Work out for him how much he would need to have in his savings account for a year before he exceeded the £500 limit.

Your friend is a higher rate taxpayer and has a large amount in a savings account which is earning 3% interest. He is worried that he will exceed the £500 of interest that he can earn free of tax as a higher rate taxpayer. Work out for him how much he would need to have in his savings account for a year before he exceeded the £500 limit.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

At his bank, Davide put $25,000 into his Registered Retirement Savings Plan (RRSP). He lives in Quebec and pays the highest tax rate of 53.31 percent. How much of a return can Been this anticipate getting for this donation? 1 $13,328 2 $25,000 3 $11,673 4 $15,786 5 Similar to Tax-Free Savings Accounts (TFSAs), RRSPs really aren't deductible for tax purposes, and no return is anticipated.
Bella Wans is interested in buying a new motorcycle. She has decided to borrow the money to pay the $25,000 purchase price of the bike. She is in the 33% income tax bracket. She can either borrow the money at an interest rate of 7% from the motorcycle dealer, or she could take out a second mortgage on her home. That mortgage would come with an interest rate of 9%. Interest payments on the mortgage would be tax deductible for Bella, but interest payments on the loan from the motorcycle dealer could not be deducted on Bella's federal tax return. a. Calculate the after-tax cost of borrowing from the motorcycle dealership. b. Calculate the after-tax cost of borrowing through a second mortgage on Bella's home. C. Which source of borrowing is less costly for Bella? d. Should Bella consider any other factors when deciding which loan to take out?
Please help me with e and f. Thanks!
Suppose your friend is being considered for a promotion at work. The promotion is expected to provide your friend an extra 10,000 dollars per year in salary. However, your friend does not want the promotion, because he just looked at his tax return and saw that if he were to earn just 5000 more per year in taxable income, it will push him into a higher tax backet. What should you tell you friend? 1) You are an idiot. Never turn down money, because tax brackets are applied 2) You should arrange for the promotion to only increase the salary by 5000 3) The decision is a logical application of NPV concepts 4) None of these are correct
Jana just found out that she is going to receive an end-of-year bonus of $40,000. She is in the 35 percent marginal tax bracket. Calculate her income tax on this bonus. Now assume that instead of receiving a bonus, Jana receives the $40,000 as a long-term capital gain. What will be her tax? Which form of compensation offers Jana the best after-tax return? Would your calculation be different if the gain was short-term rather than long-term? Give typing answer with explanation and conclusion
Please send me answer of this question immediately and i will give you like sure
4
Mike just received his income tax refund of $1600, and he needs $1850 to buy a new couch. If his money can earn 3 3/8% simple interest, how long must he invest his money?
Joe wants to own a home in the future. He asks you describe an advantages and disadvantage of a FRM versus an ARM. He then asks you to describe the advantages and disadvantages of a 15-year loan versus a 30-year loan. He also wants to know how the portion of the home payment that comprises interest changes over the years assuming he takes out an FRM. Is there anything he can do to reduce the total amount he’ll pay for the home? What else would be added to his monthly mortgage payment? What are three benefits of home ownership? What are three benefits of renting?
Two people save money in a tax-deferred Individual Retirement Account that earns 8% annually. Person A invests $ 3,000 a year from age 20 to 29, but then never saves another penny. Person B starts investing $ 3,000 a year at age 30 and saves that same amount annually for the rest of his life. Who has more money in the account at age 65? a. Person A b. Person B c. They both have the same amount of money.
Before buying the Douglas Pub business, William built up a £500,000 pension fund whilst in his previous job. William is now considering making additional payments to a personal pension fund, he asks you to: Required: Explain how he will receive full tax relief for any contributions he makes to a qualifying pension fund (2%) Advise him on the optimum contribution he should make to his qualifying pension fund from a tax perspective (2%)