On December 15th of the current year, George and Jane Murray determine they have an estimated...

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On December 15th of the current year, George and Jane Murray determine they have an estimated gross income of $100,000. In addition they report the following expenditures: State Taxes Qualified Medical Expenses Qualified deductible) Residence $10,000 12,000 interest (assume fully 14,000 On the same day George is offered an additional project which would pay him an additional $20,000. He would also have an additional $2,000 in state taxes withheld from that income at the time of payment. He has the option of completing the project during the last week of December or first week of January and will be paid immediately upon completion. In addition, George makes the maximum allowable contribution to his Roth IRA each year. He is not a participant in an active qualified retirement plan through his employer. What is the effect on taxable income for the current year if George completes the project in December? January? What would you recommend that he do? On December 15th of the current year, George and Jane Murray determine they have an estimated gross income of $100,000. In addition they report the following expenditures: State Taxes Qualified Medical Expenses Qualified deductible) Residence $10,000 12,000 interest (assume fully 14,000 On the same day George is offered an additional project which would pay him an additional $20,000. He would also have an additional $2,000 in state taxes withheld from that income at the time of payment. He has the option of completing the project during the last week of December or first week of January and will be paid immediately upon completion. In addition, George makes the maximum allowable contribution to his Roth IRA each year. He is not a participant in an active qualified retirement plan through his employer. What is the effect on taxable income for the current year if George completes the project in December? January? What would you recommend that he do?

Answer rating: 100% (QA)

If George completes the project in December the additional income of 20000 and the additional state ... View the full answer