Cassy reports a gross tax liability of $1,100. She also claims $500 of nonrefundable personal credits, $750 of refundable personal credits, and $300 of business credits. What is Cassy's tax refund or tax liability due after applying the credits? (Round your answer to the nearest whole dollar amount.)

Question

Quizplus · Accepted Answer

First, we need to subtract the nonrefundable personal credits from the gross tax liability: 
$1,100 - $500 = $600. 
Then we can subtract the business credits from this amount: 
$600 - $300 = $300. 
Now we have $300 left to apply the refundable personal credits to. We can apply all $750 of the refundable personal credits to this remaining amount: 
$300 - $750 = -$450. 
This means that Cassy has a refund of $450, which is closest to answer choice D.

Cassy Reports a Gross Tax Liability of $1,100