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1. Consider an individual with gross income of $85,000. Their deductions are $2,000 for retirement contributions. They are married and filing jointly with their spouse and plan to claim the standard deduction. There are two children under 10 years old, so they will each qualify for $3,000 in refundable child tax credits. a. Calculate this taxpayer's AGI and Taxable income for 2021. b. Using the marginal tax rates for 2021, calculate their taxes owed. C. Applying tax credits, calculate their final tax payment. d. If they have had $2,000 in taxes withhelld from their paychecks throughout the 2021 year, how much taxes do they have to pay/refund are they owed? 2. Mortgage interest is a large tax deduction for many taxpayers, which allows the deduction of the amount of money paid in interest to finance the purchase of their home. a. How does this tax break encourage home ownership? b. Would a tax credit be a better tool than a tax deduction? Explain. 3. When traveling for work, the employee can fully deduct from their taxes the cost of the hotel, but can only deduct half of their meal expenses. Why would this be the case? 1. Consider an individual with gross income of $85,000. Their deductions are $2,000 for retirement contributions. They are married and filing jointly with their spouse and plan to claim the standard deduction. There are two children under 10 years old, so they will each qualify for $3,000 in refundable child tax credits. a. Calculate this taxpayer's AGI and Taxable income for 2021. b. Using the marginal tax rates for 2021, calculate their taxes owed. C. Applying tax credits, calculate their final tax payment. d. If they have had $2,000 in taxes withhelld from their paychecks throughout the 2021 year, how much taxes do they have to pay/refund are they owed? 2. Mortgage interest is a large tax deduction for many taxpayers, which allows the deduction of the amount of money paid in interest to finance the purchase of their home. a. How does this tax break encourage home ownership? b. Would a tax credit be a better tool than a tax deduction? Explain. 3. When traveling for work, the employee can fully deduct from their taxes the cost of the hotel, but can only deduct half of their meal expenses. Why would this be the case

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