Mark and Stacy Are Married, File a Joint Return, and Have

question 842

Multiple Choice

Mark and Stacy are married, file a joint return, and have one child, age 3. Their combined AGI is $55,000. Mark and Stacy incur $3,500 of child care expenses during the current year. Mark's employer reimburses him $1,500 under a qualified dependent care assistance plan. The child and dependent care credit is

• A) $300.
• B) $700.
• C) $1,200.
• D) $600.

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Definitions:

Payback Period

The time it takes for an investment to generate enough revenue to recover the original cost.

Annuity

An investment product offering a regular payout to a beneficiary, commonly employed to generate a steady income for those who are retired.

Net Cash Inflow

The difference between all cash receipts and all cash payments over a period of time, showing the net increase or decrease in cash.

Time Value of Money Concept

The principle that money available now is worth more than the same amount in the future due to its potential earning capacity.