Nitai, who is single and has no dependents, was planning on spending the weekend repairing his car. On Friday, Nitai’s employer called and offered him $525 in overtime pay if he would agree to work over the weekend. Nitai could get his car repaired over the weekend at Autofix for $420. If Nitai works over the weekend, he will have to pay the $420 to have his car repaired, but he will earn $525. Assume Nitai’s marginal tax rate is 12 percent rate.

Required:
a. Strictly considering tax factors, should Nitai work or repair his car if the $420 he must pay to have his car fixed is deductible for AGI?
b. Given the answer in a above, by how much is Nitai better or worse off?

Other questions in category

• The reserve requirement is 10%, and Olga withdraws $3,000 for travel money from her checking account...
• The framers of the constitution wanted ________ to choose the president and vice president....
• The sales and cost data for two companies in the transportation industry are as follows:...
• What are the advantages of picking fruits safely from the tree...
• when governments intervene in markets — end of chapter problem the u.s. government provides subsidie...
• According to research, which of the following is true about the relationship between diversity in ma...
• 4.IExpress algebraically; 12% commission on the profit when
• What document explains your rights and responsibilities as a federal loan borrower?...
• What are capital gains on an investment?
• Match the following government organizations with their healthcare and/or health information technol...