Use the Tool Tab in Checkpoint to answer the following questions:
a. What is the 1040 Tax Tool under Tax designed to do?
b. George and Martha are twins, both about to become tax accountants and broke. However, with their new tax jobs starting soon, Martha decides to start saving $ 200 per month and intends to keep saving $ 200 per month for 30 years. George, on the other hand, desperately wants a new sports car and thus decides he is going to wait 5 years before starting his $ 200 per month savings plan. George figures $ 200 per month for 5 years is only a difference of $ 12,000 and what difference will delaying his savings really make? Assuming a 6 percent rate of return, using the Savings tools in Checkpoint, what is the difference in the future value of Martha’s and George’s savings plans?
c. Under Tools/ Mortgage/ 15 Year vs. 30 Year, what is the difference in total interest paid if Old Mother Hubbard is going to take out a $ 400,000 mortgage and has a 25 percent marginal tax rate when the 30 year rate is 4 percent and the 15 year rate is 3.25 percent? What will the increased monthly payment be for the 15-year mortgage?
d. With the Tax tool found on the Tool Tab, determine the marginal tax rate for a single taxpayer earning $ 60,000 who has one dependent child and takes the standard deduction. List the average rate also.