Assignment2_082267

Assignment2_082267 - BA250 Personal Finance Assignment 2 23...

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BA250 Personal Finance Assignment 2 23 March 10 Chapter 4 Review Questions Pg. 119 1. The factors that affect taxable income are your deductions, such as home mortgage interest and your exemptions, one for each member of your household. Gross is your pre-tax income while taxable income is the gross minus the exemptions and deductions. 7. The federal government also collects taxes from capital gains and dividends. The tax is not progressive because it is lower than your marginal tax rate as long as you hold the investment for 12 months or longer. There are also social security taxes that come out of your check at a flat rate of 7.65% and your employer matches this same amount. 9. The three primary types of taxable income are active, portfolio, and passive taxes. 12. The six most common itemized deductions are Medical/dental - deductable as long as they do not exceed 7.5% of your AGI Tax expenses – such as state income tax and real estate tax can be itemized Home mortgage/investment interest - can also be itemized Charity giving- also itemized Casualty and theft loss – must exceed 10% of your AGI; first $100 is exempt Miscellaneous – Tax prep expenses, un-reimbursed job expenses, etc. 15.
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Assignment2_082267 - BA250 Personal Finance Assignment 2 23...

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