Reg and Rhonda are married and have 2 children, ages 5 and 3. Rhonda has not worked

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Reg and Rhonda are married and have 2 children, ages 5 and 3. Rhonda has not worked outside the home since the birth of their first child. Now that the children are older, she would like to return to work and has a job offer that would pay her $27,000 per year. For her to take the job, the children will have to be put into a daycare center. The day-care center will cost $500 per month. Given the high cost of the day-care center, Reg and Rhonda are wondering whether it is worth it for Rhonda to take the job. They project their current-year taxable income (without considering Rhonda’s job) as $45,000. Write a letter to Rhonda explaining how much additional cash (after taxes) she will earn if she accepts the job. You should include in your letter the nontax factors Rhonda should consider before taking the job.

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Concepts In Federal Taxation

ISBN: 9780324379556

19th Edition

Authors: Kevin E. Murphy, Mark Higgins, Tonya K. Flesher

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