Use the simplified training rules only. Income tax table: 8% of the first $30,000 of taxable income, 12% of taxable income from $30,000 to $70,000, and 17% above $70,000. Taxable income equals income minus the listed deduction, and the listed credit reduces income tax after the table. Payroll tax is 8% of income; sales tax is 5% of taxable purchases; property tax is 1.4% of home value after the listed exemption. Watson household: income $96,300, deduction $11,000, credit $1,000, purchases $27,900, home value $312,000, property exemption $25,000, and estate settlement tax $1,375. Hayes household: income $110,700, deduction $10,000, credit $750, purchases $33,600, home value $375,000, property exemption $0, and estate settlement tax $395. Which conclusion should be selected in the tax-planning memo?