Question

C. How, it at all, would your answer to l'art b. change it the adopuolelo g. 20. Earned Income Credit. (Obj. 2) For each of the following situations, compute the taxpayer's 2019 earned income credit. a. Patty and Ron Barnett file a joint return, claiming their two sons, ages 3 and, as dependents. The Barnetts' AGI is $14,400, which consists entirely of Ron's wages. b. Joseph is a 25-year-old graduate student. His gross income consists of $5,000 of wag and $80 in interest from a savings account. Joseph files as single and claims no dependents. c. Suzanne and Vernon Zimmerman file a joint return, claiming their 6-year-old daughter as a dependent. The Zimmermans'AGI consists of Vernon's $26,375 in wages, and $400 in dividend income. d. Sarah files as head of household, claiming her 2-year-old son as a dependent. Sarah's AGI consists of $18,000 in wages and $3,620 in interest income.

Answer 1

Part A

Earned income credit = $5828

AGI = $14400

Maximum earned income credit with two qualifying children is $5828. Earned income credit in case of married filing jointly with two qualifying children begins with $19,030.

Part B

Earned income credit = $529

AGI = $5080

Maximum earned income credit with no qualifying children is $529. Earned income credit in case of single with no qualifying children begins with $8650.

Part C

Earned income credit = $3214

AGI = $26775

Maximum earned income credit with one qualifying children is $3526. Earned income credit in case of married filing jointly with one qualifying children begins with $24820 and ends with $41094.

Earned income credit = 3526-((26775-24820)*15.98%) = $3214

Part C

Earned income credit = $0

Investment income in terms of interest income is above the limit of $3600 in 2019 and thus not eligible for earned income credit.