Question

Steven and Trudy Madison are husband and wife and file a joint return for 2019. Both are under 65 years of age. They provide more than half of the support of their daughter, Jane (age 25), who is a full-time medical student. Jane receives a $5,000 scholarship covering her tuition at college. They furnish all of the support of Isabel (Steven's grandmother), who is age 80 and lives in a nursing home. They also provide more than half the support for Maggie (age 66), who is a friend of the family and lives with them. How many dependents do the Madisons have?

Answer 1

Susan's income includes her wages at $8 per hour and her diminishing government support starting at $16,000, both of which interact to determine her total income. A table reflecting hours worked, earnings, government support, and total income would illustrate how her work decisions impact her overall financial situation.

Step-by-step explanation:

Understanding Government Support and Income

The question requires creating a table to illustrate how Susan's choice to work affects her total income, which is the sum of her earnings from work and her level of government support. Susan earns $8 per hour and the government benefits are reduced by $1 for every $1 she earns, with a starting benefit of $16,000 if no income is earned.

Here is an example of how the table would be organized:

• Hours Worked: This would be listed in increments, such as 0 hours, 500 hours, etc., up to 2,000 hours per year.
• Earnings from Work: Calculated by multiplying the number of hours worked by her wage ($8 per hour).
• Government Support: Starts at $16,000 and is reduced by the same amount as her earnings from work.
• Total Income: The sum of her earnings from work plus the government support after reduction.

The table would demonstrate that as Susan works more hours, her earnings increase, but her government support decreases, affecting her total income accordingly.