Problem 13-34 (LO. 4, 8)

Joyce, a single parent, lives in an apartment with her two minor children (ages 8 and 10), whom she supports. Joyce earns $33,000 during 2022. She uses the standard deduction and files as a head of household.

Round all computations to the nearest dollar.

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Click to access Earned Income Credit and Phaseout Percentages Table and the Tax Rates Schedules.

a. Calculate the amount, if any, of Joyce's earned income credit. $fill in the blank 9f6dac0a2feefce_1

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b. During the year, Joyce is offered a new job that has greater future potential than her current job. If she accepts the job offer, her earnings for the year will be $39,000; however, she is afraid she will not qualify for the earned income credit. Determine the increase or decrease in Joyce's net cash flow if she accepts the new job. Since the child tax credit will be the same under either scenario, you can ignore it for purposes of this analysis. Use the Tax Rate Schedule when computing her income tax.

	Keeps Old Job		Takes New Job
Tax calculation:
Salary	$33,000		$39,000
Less: Standard deduction	fill in the blank e26063fc1fa7fb7_1		fill in the blank e26063fc1fa7fb7_2
Taxable income	$fill in the blank e26063fc1fa7fb7_3		$fill in the blank e26063fc1fa7fb7_4
Income tax	$fill in the blank e26063fc1fa7fb7_5		$fill in the blank e26063fc1fa7fb7_6
Less: Earned income credit	fill in the blank e26063fc1fa7fb7_7		fill in the blank e26063fc1fa7fb7_8
Net tax due or refund	$fill in the blank e26063fc1fa7fb7_9		$fill in the blank e26063fc1fa7fb7_10
After-tax cash flow:
Salary	$33,000		$39,000
Less: Net tax due or Add refund	fill in the blank e26063fc1fa7fb7_11		fill in the blank e26063fc1fa7fb7_12
After-tax cash flow	$fill in the blank e26063fc1fa7fb7_13		$fill in the blank e26063fc1fa7fb7_14
Net increasedecreaseincrease in cash flow if accept new job	$fill in the blank e26063fc1fa7fb7_16