Question

John and Kate are 67 and 60, respectively. John is blind. They file a joint return. They have itemized deductions totaling $25,000.00.

Their sources of income and deductions are:

Wages-----------------------------------------------------$210,000.00

Interest from savings accounts------------------------ 10,000.00

Interest from NY qualified bonds--------------------- 8,000.00

Gift from Kate’s dad-------------------------- 20,000.00

Prize won on a game show----------------------------- 750.00

Determine John and Kate’s:

• Standard Deduction

• AGI

• Taxable Income

• Tax Liability

Answer 1

ANS:

Standard deduction structure

Filing Status	Standard Deduction
Single	$12,200
Head of Household	$18,350
Married Filing Separately	$12,200
Married Filing Jointly	$24,400
Qualifying Widow(er)	$24,400

A	As per above chart John and Kate will be standard deduction is $ 24400

There are some another deductions which can be applicable to John and Kate

Additional Standard Deduction Amounts for Tax Year 2019

1

Age: If you are age 65 or older, you may increase your standard deduction by $1,650 if you file Single or Head of Household. If you are Married Filing Jointly and you OR your spouse is 65 or older, you may increase your standard deduction by $1,300. If BOTH you and your spouse are 65 or older, you may increase your standard deduction by $2,600.

2

Blindness: If you are legally blind, you may increase your standard deduction by $1,650 if filing Single or Head-of-Household. If you are Married Filing Jointly and you OR your spouse is blind, you may increase your standard deduction by $1,300. You may increase your standard deduction by $2,600 if BOTH you and your spouse are blind.

Working of Standard Deductions
As per point A following deduction allowed			$24,400
As per point 1 following deduction allowed			$1,300
As per point 2 following deduction allowed			$1,300
		Total deductions	$27,000

	AGI Calculation
	Incomes
	Wages	$                 210,000.00
	Interest on saving ac	$                   10,000.00
	Interest from NY qualified bonds	$                      8,000.00
	Gift from Kate's dad	$                   20,000.00
	Prize	$                         750.00
	Total Incomes	$                 248,750.00
Less	Deductions	$27,000
	AGI	$                 221,750.00

Calculation of Taxable Income

2019 Tax Brackets (Due April 2020)
Tax rate	Single filers	Married filing jointly*	Married filing separately	Head of household
10%	$0 – $9,700	$0 – $19,400	$0 – $9,700	$0 – $13,850
12%	$9,701 – $39,475	$19,401 – $78,950	$9,701 – $39,475	$13,851 – $52,850
22%	$39,476 – $84,200	$78,951 – $168,400	$39,476 – $84,200	$52,851 – $84,200
24%	$84,201 – $160,725	$168,401 – $321,450	$84,201 – $160,725	$84,201 – $160,700
32%	$160,726 – $204,100	$321,451 – $408,200	$160,726 – $204,100	$160,701 – $204,100
35%	$204,101 – $510,300	$408,201 – $612,350	$204,101 – $306,750	$204,101 – $510,300
37%	$510,301 or more	$612,351 or more	$306,751 or more	$510,301 or more

Based on above chart following are working
Tax %	Taxable	Tax
Tax 10%	$                                   19,400.00	$                                1,940.00
Tax 12%	$                                   59,550.00	$                                7,146.00
Tax 22%	$                                   89,450.00	$                              19,679.00
Tax 24%	$                                   53,350.00	$                              12,804.00
Total	$                                 221,750.00	$                              41,569.00