Keisha is single, has a taxable income of $122,125, and their employer has deducted $21,940 in withholding taxes for the year. According to the IRS, Keisha owes $21,200. Find Keisha’s tax refund or amount owed.

Compare the $21,940 Keisha already paid through withholding with the $21,200 tax owed. Since the withholding is $740 more than the tax owed ($21,940 − $21,200 = $740), Keisha receives a $740 refund. The correct choice is “Refund, $740.”

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