Question

Jeremy earned $101,400 in salary and $7,400 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 $29,200 in itemized deductions. (Use the tax rate schedules.) Problem 4-29 Part-c (Algo) c. Assume the original facts except that Jeremy has only $7,000 in itemized deductions. What is Jeremy's tax refund or tax due? Description Amount $ 0 (1) Gross income (2) For AGI deductions (3) Adjusted gross income (4) Standard deduction (5) Itemized deductions (6) (7) Taxable income (8) Income tax liability (9) Child tax credit $ 0 (10) Tax withholding

Answer 1

Before answering this question the following assumption are taken in to consideration

1. Taxes for 2019 are filed in 2020

2. Standard dedution taken in to consideration for 2019 - $18350 for Head of Household

3. Child Tax Credit taken in to cosideration for 2019 - $2000 per child provided the age of Child below 17

4. There is no Adjusted Gross Income Deductions

and the answer to first question is tax refund and calculated are as follows:-

1	Gross Income	108800
2	For AGI Deductions	0
3	Adjusted Gross Income	108800
4	Standard Deduction	18350
5	Itemiszed Deductions	29200
6	Taxable Income	61250
7	Income Tax Liability	7823
8	Child Tax Credit	2000
9	Net Tax Liability	5823
10	Tax Withholding	11000
11	Tax Refund	5177

And the answer to second question if Jeremy has itemised deduction has only $7000, still there is a refund of $ 293 and the calculation is as follows:-

1	Gross Income	108800
2	For AGI Deductions	0
3	Adjusted Gross Income	108800
4	Standard Deduction	18350
5	Itemized Deductions	7000
6	Taxable Income	83450
7	Income Tax Liability	12707
8	Child Tax Credit	2000
9	Net Tax Liability	10707
10	Tax Withholding	11000
11	Tax Refund	293