Question

1. Reba divorced her husband several years back. In the current year (2020), she received $87,000 in salary, $25,000 in child support from her ex-husband, and $4,500 in interest income. Her three children, Cheyenne, Jake, and Kyra, lived with her this year but only Jake and Kyra qualify as her dependents and count as qualifying persons for determining filing status. In addition, she has $6,000 in total itemized deductions available for the year. Assume she is not subject to AMT, is not self-employed, does not qualify for any additional tax credits, and has not made any prepayments of tax for the year.

a. What filing status should Reba use for her 2020 tax return? (4 points)

            b. Regardless of your answer in a., assume that Reba used Single as her filing status in 2020. Use the information above, the appropriate Federal Tax Schedule and other values from Appendix D, and the individual tax formula to calculate Reba’s 2020 tax due at the end of the year. (6 points)

            c. Regardless of your answer in a., assume that Reba used Single as her filing status and had $10,000 of itemized deductions available instead of $6,000. Would this change Reba’s taxes due at the end of the year? What is the tax due in this updated scenario? (5 points total; 2 points for Yes/No, 3 points for tax due)

            d. Regardless of your answer in a., assume that Reba used Single as her filing status and had $20,000 of itemized deductions available instead of $6,000. Would this change Reba’s taxes due at the end of the year? What is the tax due in this updated scenario? (5 points total; 2 points for Yes/No, 3 points for tax due)

           

Answer 1

a solution a) Reba is a divorcee as on 31st December 2020. A single files is a tax payer who is unmarouled, disoused, sregistered domaette partner ens lopally separated according to state labo as of the last day of the tax you bence bebe Should ylle e tocoletion as a Single for rent electrostatos Todo b Reba’s-Income and Tax.computation salary $87000 Interest Income $4500 Taxalde Income $91500 Less - Standard Deduction $ 10400 (since Standard deduction is niet taxable Income $79100 de locatie in than Hemized 2 76000 Estimated Tax 2020 $13192 Estimated Child tax coedit $ 4000 ( $2007, en hout et des 2020 Ta due 19192 dependent wild Tax Rate fedesial Tax woonkings Income Bracket $0 to 19875 $9876 to $40125 $40126 to $49150 Income $9875 $30249 $38974 12% 22% Та Taxes 987.5 3629.88 8574.28 13 191.66

Even it the itemized deductions available is $ 10000 instead of $6000 there will not be any change in the tax due as Reba shall claim standard deductions which is $12460 wshich is figliore than $ 10270 d) It itemized deduction is $ 20000 instead of $6000, then Reba can claim itemized deduction instead deduction Reba's Income and Tax combustotien Notes will be quite encouraging for me, thank you! 19 of standard qsalary $ 87000 Interest Income $4500 Toxalele Income $91500 less -Itemized deduction $20000 (Sence ostandourd deduction is lose Net taxable Income $ 7500 beneficial than itemized Estimated Tax 2020 $11520 Estimated Child Tax oudit $ 4000 2020 Tax due $7520 Federal Tax Woolkings Income on Bracket Income Tax Rate Taxes $0 to 9875 $9875 10% 987.5 $9876 to $ 40125 $36249 12% 3629188 $40126 to 871500 831374 2297 690228 11519.66 If liked the , please - this dedu liow)