1. Calculate Cheryl Stern’s taxable income, being sure to consider her exemption. Assume that the standard deduction for a single taxpayer is $5,800, and that each exemption claimed is worth $3,700.
2. Discuss Cheryl’s errors in interpreting the tax laws, and explain the difference between itemized deductions and the standard deduction.
3. Cheryl has been dating John Brooks for nearly four years, and they are seriously thinking about getting married. John has income and itemized deductions that are identical to Cheryl’s. How much tax would they pay as a married couple (using the filing status of married filing jointly and a standard deduction of $11,600) versus the total amount the two would pay as single persons (each using the filing status of single)? Strictly from a tax perspective, does it make any difference whether Cheryl and John stay single or get married? Explain.

  • CreatedFebruary 13, 2015
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