Question

Jeremy earned $101,000 in salary and $7,000 in interest income during the year. Jeremy’s employer withheld $11,000 of federal income taxes from Jeremy’s paychecks during the year. Jeremy has one qualifying dependent child who lives with him. Jeremy qualifies to file as head of household and has $27,200 in itemized deductions. (Use the tax rate schedules.)

a. Determine Jeremy's tax refund or taxes due. Description Amount S (1) Gross income (2) For AGI deductions (3) Adjusted gross income (4) Standard deduction (5) Itemized deductions (6) (7) Taxable income (8) Income tax liability (9) Child tax credit (10) Tax withholding

TAX RATE SCHEDULES

Answer 1

Part A

	Description	Amount
1	Gross income (101000+7000)	108000
2	For AGI deductions	0
3	Adjusted gross income	108000
4	Standard deduction	18350
5	Itemized deductions	27200
6	Greater of standard deductions or itemized deductions	27200
7	Taxable income	80800
8	Income tax liability	$12214(6065+(22%*(80800-52850)))
9	Child tax credit	2000
10	Tax withholding	11000
	Taxes refund	$(786)

Part B

	Description	Amount
1	Gross income (101000+7000+8550)	116550
2	For AGI deductions	0
3	Adjusted gross income	116550
4	Standard deduction	18350
5	Itemized deductions	27200
6	Greater of standard deductions or itemized deductions	27200
7	Taxable income	89350
8	Income tax liability	$13497 (6065+(22%*(80800-52850)))+(8550*15%)
9	Child tax credit	2000
10	Tax withholding	11000
	Taxes due	$497

Part C

	Description	Amount
1	Gross income (101000+7000)	108000
2	For AGI deductions	0
3	Adjusted gross income	108000
4	Standard deduction	18350
5	Itemized deductions	7000
6	Greater of standard deductions or itemized deductions	18350
7	Taxable income	89650
8	Income tax liability	$14270 (12962+(24%*(89650-84200)))
9	Child tax credit	2000
10	Tax withholding	11000
	Taxes Due	$1270