Misti Purchased a Residence This Year $\ \text{Home mortgage interest}\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\$ 2,335$

question 42

Short Answer

Misti purchased a residence this year. Misti is a single parent and lives with her 1-year old daughter. This year, Misti received a salary of $63,000 and made the following payments: $\ \text{Home mortgage interest}\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\$ 2,335$
$\ \text{Real estate taxes}\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad1,525$
$\ \text{State income taxes paid}\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad1,340$
$\ \text{Income tax preparation fee}\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad250$
$\ \text{Charitable contributions (cash to their church)}\quad\quad\quad\quad\quad\quad120$

Misti files as a head of household and claims two exemptions. Calculate her taxable income this year.

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Definitions:

Willingness to Pay

Willingness to pay represents the maximum amount an individual is prepared to spend to acquire a good or service.

Marginal Cost

The boost in total charges linked to the creation of one more unit of a product or service.

Public Good

For the benefit of all society members, goods or services are offered at no cost, either by government agencies or private individuals or organizations, not with the aim of profit.

Civil Defense System

A civil defense system encompasses measures and responses designed to protect civilians and infrastructure from natural disasters, military attacks, or other emergencies.