Question

Jennifer is unmarried, age 47, and maintains the home where she and her 15-year-old dependent son, Oscar, live. He has wage and interest income.

Jennifer has the following tax information for 2019:

Business income from sole proprietorship		95,000
Other taxable income items		10,000
Dividend income (no preferential rate)		4,000
Estimated tax payments		25,000
Itemized deductions		19,000

Compute her AGI, taxable income, tax liability, and federal tax refund or amount due.

Answer 1

Particulars	Amount	Amount
Gross income:
Business income	$          95,000
Other income	$          10,000
Dividends	$            4,000
Gross income		$        109,000
Less: deductible SE taxes		$            6,712
Adjusted gross income		$        102,288
Less:
Standard deduction	$          18,350
Itemized deduction	$          19,000
Higher of the two		$          19,000
Taxable income		$          83,288
Income tax liability		$    12,761.46
[ 6065 + ( 83288.46375 - 52850 ) × 0.22 ]
Payments:
Withholding	$          25,000
Child tax credit	$            2,000
Total payments		$          27,000
Refund due		$    14,238.54