Question

Please carefully look at the instructions and asnswe it. i have also attached the 2019 1040 Form and Schedule 1.

Please show your work on the tax return form as well.

Thank you so much in advance

Required information [The following information applies to the questions displayed below.) Marc and Michelle are married and earned salaries this year of $64,000 and $12,000, respectively. In addition to their salaries, they received interest of $350 from municipal bonds and $500 from corporate bonds. Marc contributed $2,500 to an individual retirement account, and Marc paid alimony to a prior spouse in the amount of $1,500 (under a divorce decree effective June 1, 2005). Marc and Michelle have a 10-year-old son, Matthew, who lived with them throughout the entire year. Thus, Marc and Michelle are allowed to claim a $2,000 child tax credit for Matthew. Marc and Michelle paid $6,000 of expenditures that qualify as itemized deductions and they had a total of $3,500 in federal income taxes withheld from their paychecks during the year. (Use the tax rate schedules.) a. What is Marc and Michelle's gross income? Answer is complete and correct. Description Amount Marc's salary IS 64.000 Michelle's salary 12,000 0 Corporate bond interest 500 Gross income S 76,500

Use 2020 Tax Rates Schedules

That is all the information i have

Answer 1

Ans:

(a) Marc and Michelle's Gross Income:

Description	Amount	Amount
Marc's salary	$64000
Michelle's Salary	$12000	$76000
Interest Income from Corporate Bonds		$500
Gross Income		$76500

(b) Marc and Michelle's Adjusted Gross Income:

Description	Amount
Gross Income	$76500
Less: Contribution to Retirement account	($2500)
Less: Alimony to prior spouse	($1500)
Adjusted Gross Income	$72500

(c) Total Deductions from AGI:

Description	Amount
Itemized Deduction	$6000
Total deduction from AGI	$6000

(d) Marc and Michelle's taxable Income:

Description	Amount
Adjusted Gross Income	$72500
Less: Itemized deduction	($6000)
Taxable Income	$66500

(e) Marc and Michelle's taxes payable or refund during the year:

Description	Amount
Taxable Income	$66500
Tax on taxable Income [$1975 + 12%($66500 - $19751)]	$7585
Less: Child tax credit	($2000)
Less: Federal Income Tax withheld from paycheck	($3500)
Net Tax payable by Marc and Michelle	$2085

Note:

1. Marc and Michelle are marrid filing jointly so the tax rate are applicable as given above.

2. A withholding tax is an amount that an employer withholds from employees' wages and pays directly to the government. The amount withheld is a credit against the income taxes the employee must pay during the year.

3. Tax is calculated as per 2020 Tax Rate Schedule.

4. Municipal bonds interest are tax free and hence not included in Gross Income