Question

Marvin, age 67, and Joanne age 66 are married. They have one dependent grandchild, Jimmy, age 10, who lived with them all year. Their itemized deductions total $13,400. They incurred a capital loss of $6,500 from the sale of 1BM Co. stock. They want to file a joint 2017 Federal Income Tax return Their income is as follows Marvin - 1) 2) $11,500 in pension income with $3,000 income tax withholdings $14,000 in social security benefits Joanne- 1) 2) 3) Wages from employment $20,000 with $1,500 income tax withholdings Gambling winnings $3,000 Interest from Regions Bank $85 Compute, in detail, a) the adjusted gross income, b) the taxable income and c) the 2017 income tax and d) indicate the amount, if any, of refund or taxes due

Answer 1

Particulars	Amount ($)
Pension income of Marvin	11500
Social security benefits	14000
Wages of Joanne from employment	20000
Gambling winnings	3000
Interests from banks	85
Adjusted gross income (AGI)	48585

Particulars	Amount ($)
Pension income of Marvin	11500
Social security benefits	14000
Wages of Joanne from employment	20000
Gambling winnings	3000
Interests from banks	85
Adjusted gross income (AGI)	48585
Less: Itemized deductions	13400
Taxable income	35185
For joint income tax returns tax rates are as following
Up-to $18650 @10%	1865
From $18651 to $35185 @15%	2480.1
Income tax liability	4345.1
Income tax withheld
From:
Marvin	3000
Joanne	1500
Income tax withheld in total	4500
Less: Income tax liability	4345.1
Income tax to be refunded to Marvin and Joanne	154.9