a. Determine the deposit at the end of each month. In order to have $900,000 in 37 years, you should deposit $ 430 each month. (Round up to the nearest dollar.) b. Assume that the annuity in part (a) is a tax-deferred IRA belonging to a man whose gross income is $45,000. Use the table on the left to calculate his taxes first with and then without the IRA. Assume the man is single with no dependents, has no tax credits, and takes the standard deduction. The income tax with the IRA is $ (Use the answer from part (a) to find this answer. Round up to the nearest cent as needed.) The income tax without the IRA is $1.
a. Determine the deposit at the end of each month. In order to have $900,000 in 37 years, you should deposit $ 430 each month. (Round up to the nearest dollar.) b. Assume that the annuity in part (a) is a tax-deferred IRA belonging to a man whose gross income is $45,000. Use the table on the left to calculate his taxes first with and then without the IRA. Assume the man is single with no dependents, has no tax credits, and takes the standard deduction. The income tax with the IRA is $ (Use the answer from part (a) to find this answer. Round up to the nearest cent as needed.) The income tax without the IRA is $1.
Chapter26: Tax Practice And Ethics
Section: Chapter Questions
Problem 31P
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Transcribed Image Text:You would like to have $900,000 in 37 years by making
regular deposits at the end of each month in an annuity
that pays 7% compounded monthly. The table below
shows the 2021 marginal tax rates, standard deduction,
and exemptions for a single person. Complete parts (a)
through (c).
Tax Rate
10%
12%
22%
24%
32%
35%
37%
Single
Standard Deduction
up to $9950
$9951 to $40,525
$40,526 to $86,375
$86,376 to $164,925
$164,926 to $209,425
$209,426 to $523,600
more than $523,600
$12,550
i Click the icon to view some finance formulas.
(***)
a. Determine the deposit at the end of each
month.
In order to have $900,000 in 37 years, you should
deposit $ 430 each month.
(Round up to the nearest dollar.)
b. Assume that the annuity in part (a) is
a tax-deferred IRA belonging to a man whose
gross income is $45,000. Use the table on the left
to calculate his taxes first with and then without
the IRA. Assume the man is single with
no dependents, has no tax credits, and takes the
standard deduction.
The income tax with the IRA is $
(Use the answer from part (a) to find this answer.
Round up to the nearest cent as needed.)
The income tax without the IRA is $1.
(Use the answer from part (a) to find this answer.
Round up to the nearest cent as needed.)
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