Personal Income Taxes
1. Prepare a 2010 tax return for Cassie using the financial data in the original case. You
may need to complete the following forms: Form 1040, Schedule A, Schedule B, and
Schedule D. Forms can be located at www.irs.gov.
• Cassie moved into her condo in November of 2010. Her total mortgage
interest paid for 2010 was $1,250.
• Cassie contributed $2,500 to United Way in 2010
• Cassie's tithes for 2010 totaled $7,500
• Cassie contributed $350 worth of old clothing to Salvation Army in
November 2010 and received a receipt for their donation.
• 2010 exemption amount is $3,650; standard deduction is $5,700.
• Cassie prepaid $13,500 in taxes.
• Assume that all of the capital gains distributions are long-term gains
2. What is Cassie's average tax rate? What is their marginal tax rate?
3. Approximately how much did Cassie save in taxes in 2010by contributed $4,000 to a
traditional IRA? How much would she save by contributed an additional $4,000 to a
Roth IRAs? Is this recommendation feasible for Cassie? Why or why not?
4. Given Cassie's financial status, goals, and risk tolerance, what tax strategies would you
recommend to help them reduce their tax liability in the future? Do they have enough
money to implement the recommended tax strategies?