Question

[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 $ 106,000 Description Gross income For AGI deductions Adjusted gross income ) Standard deduction ) Itemized deductions Greater of standard deduction or itemized deductions ) Taxable income $ 106,000 18,000 23,000 23,000 $ 83,000 $ 14,243 2,000 11,200 $ 4,298 ) Income tax liability Child tax credit ) Tax withholding Taxes refund

Answer 1

Let's assume Jeremy to be an unmarried individual for the year 2018

Taxable income is $83000

Tax liability is calculated as follows:

up to 9525$ @10%=$952.5

above $9525 up to $38700 i.e., 38700-9525=29175 @12%=3501

above $38700 up to $ 82500 i.e., 82500-38700=43800@ 22%=9636

above $82500 up to $83000 i.e., 83000-82500=500@24%=120

total tax liability (952.5+3501+9636+120)=14209.5

	gross income	106000
	for AGI deductions	0
	Adjusted gross total income	106000
	standard deduction	18000
	itemized deduction	23000
	greater of the standardized and itemized deduction	23000
	taxable income	83000
	income tax liability	14210
	child tax credit	2000
	tax withholding	11200
	taxes DUE	1010

IN THE SECOND CASE WHERE JEREMY HAD ONLY $7000 ITEMIZED DEDUCTION:

	gross income	106000
	for AGI deductions	0
	Adjusted gross total income	106000
	standard deduction	18000
	itemized deduction	7000
	greater of THE standardized and itemized deduction	18000
	taxable income	88000
	income tax liability	15410
	child tax credit	2000
	tax withholding	11200
	taxes DUE	2210

NOTE: Tax rates change with assesses marital status, citizenship, and residential status and thus changes tax liability.

since the above are not mentioned in the given problem, they are assumed.