Question

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. Amount $ 106,000 (2) $ 106,000 18,350 Description (1) Gross income For AGI deductions (3) Adjusted gross income (4) Standard deduction (5) Itemized deductions (6) Greater of standard deduction or itemized deductions (7) Taxable income (8) Income tax liability (9) Child tax credit (10) Tax withholding 23,000 $ 106,000

Answer 1

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Solution: As per Tax year 2019 limit, answer will be different for different year: Answer are highlighted in yellow: Description Amount Gross Income (100000+6000) 106000 For AGI Deduction Adjusted Gross Income 106000 Standard Deduction (per 2019 rule) $ 18,350 Itemized Deduction $ 23,000 Greater of Standard or itemized deduction $ 23,000 Taxable income (106000-23000) $ 83,000 Income tax liablity (6065)+(83000-52850)*22% $ 12,698 Child tax credit (per 2019 rule) $ 2,000 Tax Withholding $ 11,000 Tax Refund (Amount sign can be negative) $ -302 Less: Less: Less: 10 As per 2019, Child tax credit rule, Maximum credit per child is $2000. Will be phaseout by $50 per $1000 or proportion Increase in Modified income of $200000, in case of single and Head of household. Therefore, $ 2,000

Amount 110000 Description Gross Income (100000+6000) +4000 For AGI Deduction Adjusted Gross Income Standard Deduction (per 2019 rule) Itemized Deduction Greater of Standard or Itemized deduction Taxable income (110000-23000 Income tax liablity (6065)+(83000-52850)*22% + (4000*15%) Child tax credit (per 2019 rule) Tax Withholding Tax due (Amount sign can be negative) $ $ $ $ $ $ $ $ 110000 18,350 23,000 23,000 87,000 13,298 2,000 11,000 298 Less: Less: 10 Amount 106000 Description Gross Income (100000+6000) For AGI Deduction Adjusted Gross Income Standard Deduction (per 2019 rule) Itemized Deduction Greater of Standard or Itemized deduction Taxable income (106000-18350) Income tax liablity (12962)+(87650-84200)*24% Child tax credit (per 2019 rule) Tax Withholding Taxes due (Amount sign can be negative) $ $ $ $ $ $ $ $ 106000 18,350 7,000 18,350 87,650 13,790 2,000 11,000 790