For each of the following questions, assume you are in the 10% tax bracket. In other words, your marginal tax rate is 10% so an additional dollar of taxable income will result in an increase of tax liability by $0.10 or 10 cents. You may want to consult the slides for Module 8 Income Tax for the correct classification of various items below 1-What is the correct classification of a payment of $500 in child support and what is its impact on your tax liability?

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Child support payments are generally neither deductible for the payer nor considered taxa... View the full answer