Question

e are married and earned salaries this year of $64.000 and $12.000. respectively In addition 54. they received interest of $350 fro etirement account. and Marc paid alimony to a prior spouse in the amount of Sl son. Matthew. who lived with them throughout the entire year. Thus.Marc and Michell credit for Matthew.Marc and Michelle paid $6.000 ofexpenditures that qualify, as itemized deductions and they had a total of S5.500 in federal income taxes withheld from their paychecks during the te bonds. Marc contributed $2.500 to an individual 0-year-old e are allowed to claim a $2.000 child tax a. What is Marc and Michelle's gross income? b. What is Marc and Michelle's adjusted gross income? c. What is the total amount of Marc and Michelle's deductions from AGI? d. What is Marc and f. Complete the first two pages of Marc and Michelle's Form 1040 (use the mostu recent form available). Damarcus, Janine, Michael, and Candice). The couple received salary income of $100,000, qualified business income of $10.000 from an investment in a partnership, and they sold their home this year. They initially purchased the home three years ago for $200,000 and they sold it for $250,000. The gain on the sale qualified for the exclusion from the sale of a principal residence. The Jacksons incurred $16.500 of itemized deductions, and they had $3,550 withheld from their paychecks for federal taxes. They are also allowed to claim a child tax credit for each of their children. However, because Candice is 18 years of age, the Jacksons may claim a child tax credit for other qualifying dependents for Candice. a. What is the Jacksons' taxable income, and what is their tax liability or (refund)? b. Complete the first two pages of the Jacksons' Form 1040 (use the most recent form available 80

Answer 1

Description	Amount	Computation
(1) Realized income from all sources	$76,850	64,000 salary + 12,000 salary + 350 municipal bond interest + 500 corporate bond interest
(2) Excluded or deferred income	350	Nontaxable municipal bond interest
(3) Gross income	76,500	(1) – (2)
(4) For AGI deductions	4,000	2,500 qualified moving expenses + 1,500 alimony paid
(5) Adjusted gross income	72,500	(3) – (4)
(6) Standard deduction	12,600	Married filing jointly
(7) Itemized deductions	6,000
(8) Greater of standard deductions or itemized deductions	12,600	(6) > (7)
(9) Personal and dependency exemptions	12,150	4,050 x 3 (two personal exemptions and one dependency exemption)
(10) Total deductions from AGI	(24,750)	(8) + (9)
(11) Taxable income	$47,750	(5) + (10)
(12) Income tax liability	$6,235	(47,750 – 18,550) x 15% + 1,855 (see tax rate schedule for married filing jointly) Amount rounded to whole dollar.
(13) Other taxes	0
(14) Total tax	$6,235	(12) + (13)
(15) Credits	(1,000)	Child credit for 10-year old son Matthew
(16) Prepayments	(5,500)
Taxes refundable with return	$265	(14) + (15)+ (16)