Question

Jim and Mary Banks are married and have two children, ages 6 and 8 they fully support. In addition, Jim's mother, Tina, lived with Jim and Mary for the entire year. Tina received $1,500 of interest income from her savings account and $3,000 of Social Security benefits. Jim and Mary provided Tina with support of $7,000. Neither Jim nor Mary are covered by pension plans. Jim's brother gave him a fly fishing pole valued at $500 for his birthday. In addition, their IBM stock increased in value by $1,350. Jim is divorced from Sue (his first wife) and has one child, Steve, from that marriage. Steve lives with his mother for the majority of the year and she provides Steve with $8,000 of support. Jim and his first wife divorced in 2008. Use the following information about the Banks' 2020 finances to calculate the Banks' federal gross income (not adjusted gross income). Assume they file a married-joint return. Show your work. Salary and wages–Jim $56,000 Federal Income Tax withheld $ 5,200 Social security/Medicare $ 4,284 Montana income tax withheld $ 3,200 Salary and wages-Mary $49,200 Federal Income Tax withheld $ 3,100 Social security/Medicare $ 3,764 Montana income tax withheld $ 1,800 Interest income First Bank $ 2,500 Bozeman Muni bonds $ 3,000 Federal Savings $ 2,000 Qualified Cash Dividends IBM $ 4,500 NCR $ 2,000 Jim's Salary: $56,000 Mary's Salary: $49,200 First Bank: $2,500 Federal Savings: $2,000 AJ Add a File Record Audio Record Video

Answer 1

Statement of Income for Married Joint Return of Jim and Mary Banks	In Dollars
Income of Jim	56000
Income of Mary	49200
Standard Deduction	-24400
	105200
Total Salaried Income after Deduction	80800
Interest Income	7500
Dividend Income	6500
Gift Income	500
Total Income	95300
Deductions
Medi Care Deduction	8048
Child Tax Credit	6557
Total Taxable Income	80695
As per Federal taxes upto $ 19750 taxed @10%	1975
As per Federal taxes upto $ 60945 taxed @12%	7313.4
Total Taxes	9288.4
Federal Income Tax	8300
Montana Income Tax	5000
	13300
As tax being collected $ 13300
Refund	4011.6