Byron,54,is a Single,self-Employed,carpenter

question 78

Essay

Byron,54,is a single,self-employed,carpenter.During 2013,he earns gross revenues of $60,000 and incurs $6,000 of business expenses.His itemized deductions for the year are $8,000.Determine Byron's taxable income and his total tax liability.

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Definitions:

Return on Investment

A financial metric used to measure the profitability or efficiency of an investment, calculated by dividing net profit by the initial cost of the investment.

Required Rate

The minimum rate of return that an investment or project must offer to be considered viable or attractive.

Operating Assets

Assets used in the daily operations of a business to generate revenue, such as plant, equipment, inventory, and receivables.

Residual Income

The income that an entity generates after accounting for the cost of capital, showing what is effectively left over for shareholders.