Question

The Millers, a family of three filing joint returns, have the following information to prepare their federal income tax. Use the current federal tax forms (available at the local IRS office) to make your computation.

Salaries	45,000
Interest income, corporate bonds	1,000
Interest income, municipal bonds ( issued in 1984	1,500
State and Local income taxes	800
Real estate taxes	750
General sale taxes	750
Home mortgage interest	3,350
Credit card interest	500
Cash contributions to charities	250
Interest on education loans	400

                                                                                                   

Question 4: Compute the following

1. Adjusted gross income
2. Taxable income
3. Tax
4. Average tax rate
5. Average effective-tax rate
6. Marginal tax rate

Answer 1

Your Summary YOU MIGHT OWE: What you paid in taxes: What you should have paid in taxes: Tax credit you received this year: $2,391 $2,391 BASED UPON YOUR ANSWERS WHAT YOU TOLD US About You Filing Status: Married Filing Jointly Taxable Income $23,102 Number of Dependents: Adjusted Gross Income (AGI): $47,102 Number of Disabled Dependents: 0 Greater of Itemized or Std. Deduction: $24,000 Your Income Qualified Business Income Deduction: Total Wages: $45,000 Federal Taxes Withheld: Payments and Refundable Credits: State Income Tax Withheld: Earned Income Credit: Self Employed Income: Additional Child Tax Credit: Spouse Self Employed Income: Refundable American Opportunity Credit: Unemployment Income: Healthcare Premium Credit: Other Income or Loss Not Listed Above: Federal Income Taxes Withheld: Social Security Benefits: Estimated Taxes: Nontaxable Combat Pay: Taxes and Nonrefundable Credits: $2,391 Interest Income Earned: $2,500 State or Local Income Tax Refund: Regular Tax: $2,391 Rent, Royalty and Passive Income: Alternative Minimum Tax: Ordinary Dividends: Advance Premium Tax Credit - excess repayment: Qualified Dividends: Child Care Credit: Held One Year or Less: Credit for Other Dependents:

Your Income Taxes and Nonrefundable Credits: $2,391 Held More Than One Year: Your Expenses Nonrefundable American Opportunity Credit: Mortgage Interest: $3,350 Lifetime Learning Credit: Child Tax Credit: Charitable Donations: $250 Medical Expenses: Other Credits: Premium Tax Credit: Tax After Credits: $2,391 Shared Responsibility Payment: Self-Employment Tax: Child Care Expenses: Medicare SurTax: Net Investment Tax: Student Loan Interest: $398 Shared Responsibility Payment: Undergraduate Degree Expense: Repayment of Homebuyer Credit: Federal Quarterly Taxes Paid: Other Deductions, Adjustments and Credits: Sales Taxes: $750 Other State Or Local Taxes: $800 Real Estate Tax: $750