RECOMMENDED!!Anne, a CPA employed by a CPA firm, is an unmarried

  

Anne, a CPA employed by a CPA firm, is an unmarried taxpayer. She earned a salary of $100,000 for the current year (2014) and did not participate in the firm’s Section 401 (k) plan. Anne also received the following income and incurred the following expenses duringthe year: Income: Expenses: Interest $2,000 Dividends $900 Medical (unreimbursed) $1,500 Reai estate taxes $7,000 Mortgage interest $5,000 Interest on auto loan $2,500 Ignoring any credits, how much lower would Anne’s tax liability have been had she made a deductible employee contribution ($12,000) to the Section 401 (k) plan?

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