Case - (a) -- Determine Jeremy’s tax refund or taxes due.
Answer -
Computation of Jeremy's (Tax Refund) / Tax Due for Tax Year 2019
Description | Explanation | Amount ($) | |
(1) | Gross income | Salary + Interest income | 107000 |
(2) | For AGI deductions | - | 0 |
(3) | Adjusted gross income | (1) + (2) | 107000 |
(4) | Standard deduction | Standard deduction for head of household | 18350 |
(5) | Itemized deductions | Given in question | 24700 |
(6) | Greater of standard deduction or itemized deductions | Greater of: (4) or (5) | 24700 |
(7) | Taxable income | (3) - (6) | 82300 |
(8) | Income tax liability | Refer working note - (1) | 12544 |
(9) | Child tax credit | $2000 per child | 2000 |
(10) | Tax withholding | Given in question | 11000 |
Tax Refund | (8) - (9) - (10) | (456) | |
# Working note - (1) - Computation of Jeremy's Tax Liability for Tax Year 2019 -
Tax Rate | Taxable Income ($) | Calculation | Amount ($) | |
I. | 10% | 0 - 13850 | $13850 * 10% | 1385 |
II. | 12% | 13851 - 52850 | ($52850 - $13850) * 12% | 4680 |
III. | 22% | 52851 - 84200 | ($82300 - $52850) * 22% | 6479 |
Jeremy's Tax Liability | I + II + III | 12544 | ||
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Case - (b) -- Assume that in addition to the original facts, Jeremy has a long-term capital gain of $6050. What is Jeremy’s tax refund or tax due including the tax on the capital gain?
Answer -
Computation of Jeremy's (Tax Refund) / Tax Due for Tax Year 2019
Description | Explanation | Amount ($) | |
(1) | Gross income | Salary + Interest income + Long-term capital gains | 113050 |
(2) | For AGI deductions | - | 0 |
(3) | Adjusted gross income | (1) + (2) | 113050 |
(4) | Standard deduction | Standard deduction for head of household | 18350 |
(5) | Itemized deductions | Given in question | 24700 |
(6) | Greater of standard deduction or itemized deductions | Greater of: (4) or (5) | 24700 |
(7) | Taxable income | (3) - (6) | 88350 |
(8) | Income tax liability | Refer working note - (1) | 13452 |
(9) | Child tax credit | $2000 per child | 2000 |
(10) | Tax withholding | Given in question | 11000 |
Tax Due | 452 | ||
# Working note - (1) - Computation of Jeremy's Tax Liability for Tax Year 2019 -
Tax Rate | Taxable Income ($) | Calculation | Amount ($) | |
I. | 10% | 0 - 13850 | $13850 * 10% | 1385 |
II. | 12% | 13851 - 52850 | ($52850 - $13850) * 12% | 4680 |
III. | 22% | 52851 - 84200 | ($82300 - $52850) * 22% | 6479 |
Regular income tax | I + II + III | 12544 | ||
Add: Long-term capital gains tax | $6050 * 15% | 908 | ||
Jeremy's Tax Liability | $12544 + $908 | 13452 | ||
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Case - (c) -- Assume the original facts except that Jeremy has only $7000 in itemized deductions. What is Jeremy’s tax refund or tax due?
Answer -
Computation of Jeremy's (Tax Refund) / Tax Due for Tax Year 2019
Description | Explanation | Amount ($) | |
(1) | Gross income | Salary + Interest income | 107000 |
(2) | For AGI deductions | - | 0 |
(3) | Adjusted gross income | (1) + (2) | 107000 |
(4) | Standard deduction | Standard deduction for head of household | 18350 |
(5) | Itemized deductions | Given in question | 7000 |
(6) | Greater of standard deduction or itemized deductions | Greater of: (4) or (5) | 18350 |
(7) | Taxable income | (3) - (6) | 88650 |
(8) | Income tax liability | Refer working note - (1) | 14030 |
(9) | Child tax credit | $2000 per child | 2000 |
(10) | Tax withholding | Given in question | 11000 |
Tax Due | (8) - (9) - (10) | 1030 | |
# Working note - (1) - Computation of Jeremy's Tax Liability for Tax Year 2019 -
Tax Rate | Taxable Income ($) | Calculation | Amount ($) | |
I. | 10% | 0 - 13850 | $13850 * 10% | 1385 |
II. | 12% | 13851 - 52850 | ($52850 - $13850) * 12% | 4680 |
III. | 22% | 52851 - 84200 | ($84200 - $52850) * 22% | 6897 |
IV. | 24% | 84201 - 160700 | ($88650 - $84200) * 24% | 1068 |
Jeremy's Tax Liability | I + II + III + IV | 14030 | ||
Required information The following information applies to the questions displayed below. Jeremy earned $100,500 in salary...
Required information [The following information applies to the questions displayed below.) Jeremy earned $100,500 in salary and $6,500 in interest income during the year. Jeremy's employer withheld $11,000 of federal income taxes from Jeremy's paychecks during the year. Jeremy has one qualifying dependent child who lives with him. Jeremy qualifies to file as head of household and has $24,700 in itemized deductions. (Use the tax rate schedules.) a. Determine Jeremy's tax refund or taxes due. Description Amount (1) Gross income...
Required information [The following information applies to the questions displayed below.] Jeremy earned $100,000 in salary and $6,000 in interest income during the year. Jeremy's employer withheld $11,000 of federal income taxes from Jeremy's paychecks during the year. Jeremy has one qualifying dependent child who lives with him. Jeremy qualifies to file as head of household and has $23,000 in itemized deductions. (Use the tax rate schedules.) a. Determine Jeremy's tax refund or taxes due. Description Amount $ 0 (1)...
[The following information applies to the questions displayed below. Jeremy earned $100,000 in salary and $6,000 in interest income during the year. Jeremy's employer withheld $11,200 of federal income taxes from Jeremy's paychecks during the year. Jeremy has one qualifying dependent child who lives with him. Jeremy qualifies to file as head of household and has $23,000 in itemized deductions. (Use the tax rate schedules.) etermine Jeremy's tax refund or taxes due Answer is complete but not entirely correct Amount...
Required information [The following information applies to the questions displayed below.) Jeremy earned $102,500 in salary and $8,500 in interest income during the year. Jeremy's employer withheld $11,000 of federal income taxes from Jeremy's paychecks during the year. Jeremy has one qualifying dependent child who lives with him and qualifies him for a $2,000 child tax credit. Jeremy qualifies to file as head of household and has $34,700 in itemized deductions. (Use the tax rate schedules.) ook Hint a. Determine...
Required information [The following information applies to the questions displayed below.) Jeremy earned $101,300 in salary and $7,300 in interest income during the year. Jeremy's employer withheld $11,000 of federal income taxes from Jeremy's paychecks during the year. Jeremy has one qualifying dependent child who lives with him. Jeremy qualifies to file as head of household and has $28,700 in itemized deductions. (Use the tax rate schedules.) a. Determine Jeremy's tax refund or taxes due. Description Amount (1) Gross income...
Required information [The following information applies to the questions displayed below.) Jeremy earned $101,500 in salary and $7,500 in interest income during the year. Jeremy's employer withheld $11,000 of federal income taxes from Jeremy's paychecks during the year. Jeremy has one qualifying dependent child who lives with him. Jeremy qualifies to file as head of household and has $29,700 in itemized deductions. (Use the tax rate schedules.) a. Determine Jeremy's tax refund or taxes due. Amount $ 109,000 $ 109,000...
Required information [The following information applies to the questions displayed below.) Jeremy earned $100,000 in salary and $6.000 in interest income during the year. Jeremy's employer withheld $11,000 of federal income taxes from Jeremy's paychecks during the year. Jeremy has one qualifying dependent child who lives with him. Jeremy qualifies to file as head of household and has $23,000 in itemized deductions. (Use the tax rate schedules.) c. Assume the original facts except that Jeremy has only $7,000 in itemized...
Required information [The following information applies to the questions displayed below.) Jeremy earned $100,000 in salary and $6.000 in interest income during the year. Jeremy's employer withheld $11,000 of federal income taxes from Jeremy's paychecks during the year. Jeremy has one qualifying dependent child who lives with him. Jeremy qualifies to file as head of household and has $23,000 in itemized deductions. (Use the tax rate schedules.) b. Assume that in addition to the original facts, Jeremy has a long-term...
Required information [The following information applies to the questions displayed below.) Jeremy earned $100,900 in salary and $6,900 in interest income during the year. Jeremy's employer withheld $11,000 of federal income taxes from Jeremy's paychecks during the year. Jeremy has one qualifying dependent child who lives with him. Jeremy qualifies to file as head of household and has $26,700 in itemized deductions. (Use the tax rate schedules.) b. Assume that in addition to the original facts, Jeremy has a long-term...
[The following information applies to the questions displayed below.) Jeremy earned $102,300 in salary and $8,300 in interest income during the year. Jeremy's employer withheld $11,000 of federal income taxes from Jeremy's paychecks during the year. Jeremy has one qualifying dependent child who lives with him. Jeremy qualifies to file as head of household and has $33,700 in itemized deductions. (Use the tax rate schedules.) b. Assume that in addition to the original facts, Jeremy has a long-term capital gain...