Bang Nguyen Recently Graduated from College and Started Working in a Good

question 76

Multiple Choice

Bang Nguyen recently graduated from college and started working in a good job. He has a little money invested in a stock that pays no dividends. He lives in an apartment, is single, and has no dependents. He has a $22,000 student loan balance and he paid $600 interest in 2011. He is considering going back to school part-time for some additional computer classes. He does not have a personal IRA and he contributed 2% of his $38,750 salary to his 401K plan at work for 2011. He is just completing his tax return for 2011. Based on the information below, answer the following questions.

-Based on Bang's completed tax return, what advice would you give him to lower his tax liability for 2012?

• A) He should definitely take the computer classes in 2012.
• B) He should sell his stock.
• C) He should increase his contribution to his 401K plan at work.
• D) He should get a roommate and claim him as a dependent.
• E) Both A and C are good advice.

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Definitions:

Intellectual Incompetence

A state or condition wherein an individual lacks the necessary cognitive skills or knowledge to understand or address specific issues effectively.

Hostile Attribution Bias

The habit of interpreting the conduct of others as aggressive, regardless of whether such conduct is vague or innocent.

Defense Mechanism

Psychological strategies employed by individuals to cope with reality and to maintain self-image by unconsciously denying or distorting reality.

Aggressive Behaviors

Actions or conducts that are assertive, forceful, or hostile, often intended to dominate or control.