Question

2. If Lola Harper had the following itemized deductions, should she use Schedule A or the standard deduction? The standard deduction for her tax situation is $12,000.

Donations to church and other charities, $6,050

Medical and dental expenses exceeding 10 percent of adjusted gross income, $2,400

State income tax, $4,690

5. What would be the average tax rate for a person who paid taxes of $4,584 on a taxable income of $41,670?

8. If $4,026 was withheld during the year and taxes owed were $4,050, would the person owe an additional amount or receive a refund? What is the amount?

Answer 1

2) Total Schedule A deductions = 6050 + 2400+4690, which is 13,140 This is more than the standard deuctions, so Lola should use Schedule A deductions 5) Average tax rate= Taxes paid / Taxable income = 4584 / 41670 = 11.0% Since taxes owed are higher than the witheld amount, the person would owe an additional amount. The owed amount would be $24 i.e. the difference between owed and witheld amount 8)