In the chart below, please enter each person’s 1040 results. …

Business Questions

In the chart below, enter the results of each person’s 1040. Specifically, are they going to receive a refund or owe taxes? In what amount?

Short Answer

Edgar, Melinda, and Marcus receive tax refunds, with amounts of $336, $501, and $6,896 respectively, indicating overpayments in taxes. In contrast, Borris owes $1,741, highlighting the need for better withholding practices to avoid tax liabilities.

Step-by-Step Solution

Step 1: Understand the Refunds

Edgar, Melinda, and Marcus will receive tax refunds, which represent the amounts they overpaid in taxes over the year. A refund indicates that these taxpayers have provided more money to the government than necessary.

  • Edgar’s refund: $336
  • Melinda’s refund: $501
  • Marcus’s refund: $6,896

Step 2: Analyze Marcus’s Situation

Among the individuals receiving refunds, Marcus’s situation stands out due to the substantially larger amount he’s getting back. A refund of $6,896 indicates a significant overpayment and could be due to various factors such as changes in income or withholding practices.

Step 3: Borris’s Tax Obligation

In contrast, Borris owes $1,741 in taxes. This implies that he did not withhold enough money from his paycheck throughout the year, resulting in a tax liability he must settle. Understanding this difference is vital for effective tax planning in the future.

Related Concepts

Refund

A payment returned to a taxpayer who has overpaid their taxes during the year

Tax Liability

The total amount of tax that an individual owes to the government due to insufficient withholding or underpayment

Withholding

The practice of deducting a portion of an employee’s salary or wages to pay taxes ahead of time, which can affect the amount refunded or owed at tax time.

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