Question

Life situations:

Husband/wife, two kids, 1 income, mortgage, good salary, some savings, and no college fund.

Create a 700- to 1,050-word analysis in which the following :

Describe the risk tolerance for the life situation

Answer 1

In the given life situation , there is couple who have 2 kids but have single income with good salary  and has mortgage and some savings but no college fund .

As per federal Income Tax Rules ,the couple falls under the criteria of married and they have option to file return jointly as married and single , as only one of them have job so its beneficial for them they filled there return Jointly as they will be get standard deduction of married couple filler , for the year 2019 standard deduction for married couples is $24400 as compare to $12200 of single filler

This will save them $12200 in there taxable income , and they can get child tax credit of $2000 each of there qualifying child i.e total $4000 child tax credit if there adjusted gross income as married couple is below $400000,and the child is below 17 years of age

they can get $500 credit of other dependent if child is above 17 and he is fully dependent on them and lived them and should be us citizen

They Have a mortgage and interest on mortgage loan will not deducted from there taxable income as this is itemized deduction and tax payer as per 2018 tax cuts and job cuts act will be liable to get only one of them from standard or itemized deduction .

as there is no college fund with them for there children so they can get apply for educational loan and they can get deduction on there taxable income or they can apply for educational credits for there children to support there education .

As they have some savings which can be invested in municipal bonds or tax free bonds which will  get them tax free interest .

The situation of family is at least risk if the husband or wife retain there job as there is good salary which they are earning and there liability to pay federal tax will be low as

they will attract standard deduction of $24400

and tax credit of $4000

And tax free interest and there are lots of educational  schemes which can support there child education

If earner in the family lose there job , then the family will be at huge risk as they have some savings which will not enough for them to survive there living condition and there children education.