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Leonardo, who is married but files separately, earns $61,000 of taxable income. He also has $15,600 in city of Tulsa bonds. His wife, Theresa, earns $50,600 of taxable income. If Leonardo and his wife are married filing jointly in 2026, what is Leonardo and Theresa’s effective tax rate for 2026? (Use tax rate schedule (opens in a new tab).) Note: Round your final answer to two decimal places.

Assume that John’s marginal tax rate is 17 percent. If a city of Austin bond pays 7.8 percent interest, what interest rate would a corporate bond have to offer for John to be indifferent between the two bonds?

Mike started a calendar-year business on September 1stSeptember 1st of this year by paying 12 months of rent on his shop at $1,450 per month. What is the maximum amount of rent that Mike can deduct this year under each type of accounting method?

Sadie received $52,500 of compensation from her employer (including $2,000 of qualifying overtime compensation eligible for the qualified overtime compensation deduction) and she received $570 of interest from a corporate bond. What is the amount of Sadie’s gross income from these items?

Which of the following decreases the benefits of accelerating deductions?

Manny, a single taxpayer, earns $70,000 per year in taxable income and an additional $12,500 per year in city of Boston bonds. What is Manny’s current marginal tax rate for 2026? (Use tax rate schedule (opens in a new tab).)

Nontax factor(s) investors should consider when choosing among investments include:

Joanna received $57,600 compensation from her employer (no overtime), the value of her stock in ABC company appreciated by $10,800 during the year (but she did not sell any of the stock), and she received $45,000 of life insurance proceeds from the death of her spouse. What is the amount of Joanna’s gross income from these items?

Sabina recently was sickened by eating spoiled peanut butter. She successfully sued the manufacturer for her medical bills ($3,940), her emotional distress ($8,150—she now fears peanut butter), and punitive damages ($58,750). What amount must Sabina include in her gross income?

Angelena files as a head of household. In 2026, she reported $68,100 of taxable income, including a $12,700 qualified dividend. What is her gross tax liability? (Use the tax rate schedules (opens in a new tab), long-term capital gains tax brackets (opens in a new tab).) Note: Round your answer to the nearest whole dollar amount.