For 2009,Godfrey Had $5,000 in Itemized Deductions for State Income

question 39

Multiple Choice

For 2009,Godfrey had $5,000 in itemized deductions for state income taxes paid.In 2011,Godfrey's 2009 state income tax return was audited and he was required to pay an additional $4,000 of state income taxes.Godfrey was in the 35% tax bracket in 2009,but his marginal tax bracket in 2011 is 15%.He will itemize his deductions on his 2011 return.

• A)The $4,000 payment in 2011 is not deductible.
• B)Godfrey must amend his 2009 return.
• C)The $4,000 payment in 2011 will reduce his 2011 Federal income tax by $600 ($4,000 * 15%).
• D)Godfrey can reduce his 2011 Federal income tax by $1,400 ($4,000 * 35%).
• E)None of the above.

Analyze different investment options and their returns, including comparing annuity quotes from different companies.

Apply compound interest formulas to solve problems related to savings, loans, and investments.

Calculate the effect of inflation on savings and investment plans.

Utilize financial formulas to calculate loan amounts, repayment schedules, and outstanding balances.

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Definitions:

Elastic

Describing a situation where the demand or supply for a good or service is sensitive to changes in price.

Supply of Cars

The total number of cars that manufacturers are willing and able to sell at a given price level in a given period.

Time Interval

A specific duration of time between two points or events.

Input Prices

The cost of resources used in the production process.