Question

1. Lacy is a single taxpayer. In 2019, her taxable income is $40,200. What is her tax liability in each of the following alternative situations? All of her income is salary from her employer.

2. In 2019, Carson is claimed as a dependent on his parents' tax return. Carson's parents provided most of his support. What is Carson's tax liability for the year in each of the following alternative circumstances? Carson is 17 years old at year-end and earned $14,825 from his summer job and part-time job after school. This was his only source of income.

3. In 2019, Elaine paid $2,520 of tuition and $1,380 for books for her dependent son to attend State University this past fall as a freshman. Elaine files a joint return with her husband.
What is the maximum American opportunity tax credit that Elaine can claim for the tuition payment and books in each of the following alternative situations? Elaine’s AGI is $100,500.

Answer 1

D Aus) Name of Assessee Lacy Status of filling Single Tampayen Computation of Tax liability. Total Income Received from employer 2 $ 40,200 By Using Tax Rates Table for the year 2019 Under Single Tampayer filling Lacy falls under the Bracket of $39,476 to $84, 200 Hence, The Tax Rates are a $4,543 + 220% of the excess over $ 39,476 $ 4,543 + 0.22 x ($40,200 -$39,476 $4,543 + 0.22 X$724 $4,543 +$159.28 - Tax Payable lacy's $4,702.28 Taxe Liability is $4,702.28 Hence 4 + Aug

• As per 2) Ausa) Internal Revenue Code Person i dependent and under the 65 and he age earned only income does not Exceed $12,000 then he g not required to file return. Here Carson is 17 year old and dependent tan Return and Earned from his Summer job and part-time job After School is $14,825 which is above of $ 12,000 Therefore he has to file return of 와 his income As per 2019 Tax Rules. on his parents' 9 a Taxpayer . Standard deduction Amount for an individual who may be claimed as a dependent by another Cannot Exceed the Greater of W $1,100 or (2) Individual Earned Income + $350 (not to Exceed the regular Standard deduction Amount Earning is so, Here Carson $14,825 so, Calculated Under the Regular Taxpayer . Carson $ 14,825 less: Standard deduction (As per 42,200 federal income tan rules! 2019) Carson Tanable Income $ 2,625 Earnings

Дg Here, Carson . Per Hence, the Federal Taxe Bracket 2019 (for Individual) falls under the Bracket of $0 to $ 19, 4oo Tan Rates are 10% of Taxable Income 10% of $2625 Carson's Tax liability = $262.50 Hence, Carson's tom Liability for the year 2019 is $ 262.50 3) Ana American Tan Credit is available for like qualifying tution and eligible expenses Bools and Expense • American Opportunity credit Maximum per eligible student is $2,500 per year for first four years of post secondary education. * 100% for first: $ 2000 of Expenser rand 25% of Next $2000 Exupenekse limits to claim American Opportunity Tax Credit

O To claim full Credit Your Modified Adjusted Gross Income [MAGI) must be $_80,000 or less $160,000 or less for married filling jointly). You received reduced amount of the Credit if your MAGI s Lover $ 80,000 but less than $90,000 Cover $ 160,000 but less them $180,000 for married filing jointly). You Cannot Claim the Credit of your MAGI is over $ 90,000 ($180000 for Married filing jointly). H In the Ginen Questio The Qualifying Expenses of Elaine paid are $ 52,52041,380) $ 3,900 Therefore, Elaine Adjusted Gross Income (AGI) u $ 100,500 and Married files retwin jointly with her husband. The AGI of Elaine is within threshold off $ 160,000 therefore Elaine u to claim full Credit. Hence the Claim is $2000 of 1000% + 25% of (1,3,900 - $ 2000) $ 2000 + 25% of 1900 $ 2,000 + $ 475 $ 2,475 Claim Amount

C Any Mence. The maximum American Opportunity tax credit that Elaine can claim for the tuition books in the situt Elaine's AGL is $100,500 $ 2,475 Payment and is of Duran

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