Chris, a Single Taxpayer, Had the Following Income and Deductions

question 28

Essay

Chris, a single taxpayer, had the following income and deductions during 2016:
$\begin{array}{ll}\text { Salary } & \$ 55,000 \\\text { Interest on bank account } & 300 \\\text { Tax-exempt interest } & 200 \\\text { Deduction for AGI } & 3,500 \\\text { Itemized deductions } & 8,000 \\\text { Taxes withheld } & 6,500\end{array}$ Calculate Chris's tax liability due or refund.

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Definitions:

Irrational Decisions

Decisions made that do not follow logical reasoning or expected outcomes.

Opportunity Cost

The missed opportunity for profit from different options when a specific choice is made.

Resources

Assets, materials, and inputs used to produce goods and services, including land, labor, capital, and entrepreneurship.

Mental Accounting

A concept in behavioral economics where individuals categorize and treat money differently depending on its origin, intended use, or other subjective criteria, affecting spending and investment decisions.