Question

Sheila and Joe Wells are married with one dependent child. During 2020, they have gross income of $159,800, deductions for AGI of $5,500, itemized deductions of $25,000 and a dependent tax credit of $2,000. The Wells' had $22,000 withheld by their employer for federal income tax. They have a tax (due/refund) of $

Answer 1

Particulars	Amount	Amount
Gross income:
Income	$       1,59,800
Gross income		$       1,59,800
For AGI deductions		$            5,500
Adjusted gross income		$      1,54,300
Less:
Standard deduction	$          24,800
Itemized deduction	$          25,000
Higher of the two	$          25,000	$         (25,000)
Personal exemptions		$                   -
Taxable income		$       1,29,300
Income tax liability		$    20,026.00
[ 9235 + ( 129300 - 80250 ) × 0.22 ]
Less: credit		$       2,000.00
Net liability		$          18,026
Withholding		$          22,000
Refund		$            3,974

Answer is:

Refund of 3,974

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