Mike and Mindy Have Two Children,Sarah and Jake

question 16

Multiple Choice

Mike and Mindy have two children,Sarah and Jake.Sarah has interest and dividend income of $2,200.Jake has interest and dividend income of $750.For 2011,Mike and Mindy have taxable income of $76,000 which puts them in the 25 percent federal tax bracket.If each child files his/her own tax return,what is Sarah and Jake's tax liability?

• A)Sarah's tax liability is $100;Jake's tax liability is $0.
• B)Sarah's tax liability is $170;Jake's tax liability is $0.
• C)Sarah's tax liability is $170;Jake's tax liability is $95.
• D)Sarah's tax liability is $550;Jake's tax liability is $188.

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Definitions:

Federal Budget Deficit

The deficit occurring when government spending surpasses its income in a specific fiscal year.

National Debt

The total amount of money that a country's government has borrowed, by various means, and has yet to repay.

Federal Government Budget Deficit

The financial situation in which the federal government's expenditures exceed its revenues, leading to borrowing and debt accumulation.

Interest Rates

The percentage charged on a loan or paid on deposited funds.