The Morrisons paid $25,250 in interest on their main home and 13,250 in interest on a second mortgage on their main home which they used to purchase a luxury cruise in 2019. They paid 9,520 in property taxes and 13,108 in state income taxes. Their charitable cash contributions were $3,698 and the interest paid on their brokerage account (investments) was $2,298.
The Morrisons had $47,000 withheld for federal taxes from their paychecks during 2019.
What is the Morrisons final amount that should be paid or refunded with their return for 2019?
first we understand what is Gross income :-
Gross income refers to the total income earned by an individual on a paycheck before taxes and other deductions. It comprises all incomes received by an individual from all sources – including wages, rental income, interest income, and dividends.
calulation for total taxable income of Mr. and Mrs. Morrison for year 2019:-
gross income :- $342450.
less :- deduction u/s 80(c)
intrest on bonds ($16200)
intrest paid on home loan ($25250)
less :- deduction u/s(24E)
scholarship for child ($30000)
less :- deduction u/s (80U)
charitable cash ($3698)
less :- property tex ($9520)
less :- state income tax ($13108)
add :- moetgage loan intrest $13250.
add :- intrest paid on brokarage a/c $2298.
less:- withheld federal taxes ($47000)
after calculating as above Mr & Mrs Morrison for year 2019
net taxable income is $213222.
now income tax amount payable for Mr & Mrs Morrison is as under :-
net income $213222.
tax % = 24%
so income tax = net income * rate of tax
= $213222*24%
= $51173.28
=$51174 (r/off).
so net tax payable by Mr & Mrs Morrison is $ 51174.
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