Please show me steps on how to solve these problems!..
1. Isabel a calendar-year taxpayer uses the cash method of accounting for her sole proprietorship. In late December she received a $26000
bill from her accountant for consulting services related to her small business. Isabel can pay the $26000 bill anytime before January 30 of next year without
penalty. Assume her marginal tax rate is 40 percent this year and next year and that she can earn an after-tax rate of return of 10 percent on her
1-a. What is the after-tax cost if Isabel pays the $26000 bill in January?
(PV of single payment at various ARR: [0%- 1year: 0.909] [10%-2 year: 0.826])
2. Daniel is considering selling two stocks that have not fared well over recent years. A friend recently informed Daniel that one of his stocks has a special
designation which allows him to treat a loss up to $30000 on this stock as an ordinary loss rather than the typical capital loss. Daniel figures that he has
a loss of $36000 on each stock. If Daniel%u2019s marginal tax rate is 35 percent and he has $72000 of other capital gains (taxed at 15 percent) what is the
tax savings from the special tax treatment?
3. Matteo who is single and has no dependents was planning on spending the weekend repairing his car. On Friday
Matteo%u2019s employer called and offered him $200 in overtime pay if he would agree to work over the weekend. Matteo could get his car repaired over the
weekend at Autofix for $148. If Matteo works over the weekend he will have to pay the $148 to have his car repaired but he will earn $200. Assume Matteo pays
tax at a flat 15 percent rate. (Do not round intermediate calculations. Round your answers to 2 decimal
3-a. Considering monetary considerations only should Matteo work or repair the car if the $148 he must pay to have his car fixed is not deductible? work or
3-b. Given the answer in a-1 above by how much is Matteo better or worse off?
3-c. Considering monetary considerations only should Matteo work or repair the car if the $148 he must pay to have his car fixed is
deductible for AGI? work or repair?
3-d. Given the answer in b-1 above by how much is Matteo better or worse off?
4. Marc and Michelle are married and earned salaries this year of $64000 and $12000 respectively. In addition to
their salaries they received interest of $350 from municipal bonds and $500 from corporate bonds. Marc and Michelle also paid $2500 of qualifying moving
expenses and Marc paid alimony to a prior spouse in the amount of $1500. Marc and Michelle have a 10-year-old son Matthew who lived with them throughout
the entire year. Thus Marc and Michelle are allowed to claim a $1000 child tax credit for Matthew. Marc and Michelle paid $6000 of expenditures that qualify
as itemized deductions and they had a total of $5500 in federal income taxes withheld from their paychecks during the course of the year.
4-a. What is Marc and Michelle%u2019s gross income?
4-b. What is Marc and Michelle%u2019s adjusted gross income?
4-c. What is the total amount of Marc and Michelle%u2019s deductions from AGI?
4-d. What is Marc and Michelle%u2019s taxable income?
4-e. What is Marc and Michelle%u2019s taxes payable or refund due for the year? (Round your answer to two decimal places.)