For 2018, Tom Has Taxable Income of $48,005

question 32

Essay

For 2018, Tom has taxable income of $48,005. When he uses the Tax Tables, Tom finds that his tax liability is higher than under the Tax Rate Schedules.
a. Why is there a difference?
b. Can Tom use the Tax Rate Schedules?

---

Definitions:

Sales Transaction

A financial exchange or transfer of goods, services, or assets between two or more parties.

Good Faith Purchasers

Individuals who buy property without knowledge of any existing claims or liens against it.

Code

A set of rules or principles designed to regulate behavior or to prescribe standards.

Risk of Loss

The risk of loss refers to the potential for an asset to lose value or for an investment to not perform as expected, often shifted from seller to buyer upon completion of certain conditions in a contract.