## Related questions with answers

Parker is single and paying off his graduate student loan. The monthly payment is $679.34. He is hoping to receive an income tax refund that is large enough to make at least one monthly payment. His taxable income is$77,911 and his employer withheld $19,458 in federal taxes. a. How much of a refund will Tony receive? b. How many loan payments will Parker be able to make with this refund?

Solution

VerifiedGiven:

$\begin{align*} \text{Single} \\ \text{Taxable income}&=\$77,911 \\ \text{Withheld federal taxes}&=\$19,458 \\ \text{Monthly payment}&=\$679.34 \end{align*}$

(a) The taxable income is at least $77,900 but less than $77,950.

The tax is then given in the row "77,900 77,950" and in the column "Single" of the given tax tables:

$\text{Tax}=\$15,825$

We note that the tax $15,825 is lower than the withheld federal taxes $19,458, which means that Drew gets a refund.

The refund is the difference between the withheld federal taxes and the tax.

$\begin{align*} \text{Refund}&=\text{Withheld federal taxes}-\text{Tax} \\ &=\$19,458-\$15,825 \\ &=\$3,633 \end{align*}$

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