Question

28. Jeremy earned $100,000 in salary and $6,000 in interest income during the year. Jeremy's employer withheld $11.000 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, a) Determine Jeremy's tax refund or taxes due, il b) Assume that in addition to the original facts. Jeremy has a long-term capital gain of $4.000. What is Jeremy's tax refund or tax due including the tax on the capital gain? e Assume the original facts except that Jeremy has only $7.000 in itemized deduce tions. What is Jeremy's tax refund or tax due? 29. David and Lilly Fernandez have determined their tax liability on their joint lax re. turn to be $1.700. They have made prepayments of $1.500 and also have a child tax credit of $2.000. What is the amount of their tax refund or taxes due?

Answer 1

Description	Amount	Computation
(1)Gross Income	$106,000	$100,000 Salary+ $6000 Interest income
(2)For AGI Deductions	0
(3)Adjusted Gross Income	$106,000	(1) - (2)
(4)Standard Deduction	$18,350	Head of Household - for the year 2019
(5)Itemized deductions	$23,000	Itemized deduction is eliminated for the year 2019
(6)Greater of standard deduction and itemized deductions	$23,000
(7)Taxable Income	$83,000	(3) - (6)
(8)Income Tax liability	$12,698	6065+(83000-52850)*22%
(9)Child Tax credit	$2,000
(10)Tax withholding	$11,000
Income Tax Refund	($302)	(8) - (9) - (10)
b.
Description	Amount	Computation
(1)Gross Income	$110,000	$100,000 + $6000 +$4000
(2)For AGI Deductions	0
(3)Adjusted Gross Income	$110,000	(1) - (2)
(4)Standard Deduction	$18,350	Head of Household - for the year 2019
(5)Itemized deductions	$23,000	Itemized deduction is eliminated for the year 2019
(6)Greater of standard deduction and itemized deductions	$23,000
(7)Taxable Income	$87,000	(3) - (6)
(8)Taxed at Ordianary Rates	$12,698	6065+(83000-52850)*22%
(9)Capital Gain Tax	$600	4000*15%
(10)Total Income Tax liability	$13,298
(11)Child Tax credit	$2,000
(12)Tax withholding	$11,000
Income Tax liability	$298	(10)-(11)-(12)
c.
Description	Amount	Computation
(1)Gross Income	$106,000	$100,000 Salary+ $6000 Interest income
(2)For AGI Deductions	0
(3)Adjusted Gross Income	$106,000	(1) - (2)
(4)Standard Deduction	$18,350	Head of Household - for the year 2019
(5)Itemized deductions	$7,000	Itemized deduction is eliminated for the year 2019
(6)Greater of standard deduction and itemized deductions	$18,350
(7)Taxable Income	$87,650	(3) - (6)
(8)Income Tax liability	$13,790	12962+(87650-84200)*24%
(9)Child Tax credit	$2,000
(10)Tax withholding	$11,000
Income Tax liability	$790	(8) - (9) - (10)
29
Income Tax liability	$1,700
Prepayments	($1,500)
Child Tax credit	($2,000)
Refund	$1,800