Question

Mr. and Mrs. Daniels, age 67 and 52, file a joint tax return. They have itemized deductions of $25,000. They have the following information for 2019: Salaries 122,000 Interest income 6,000 Allowable adjustments 15,000 Capital gain eligible for 15% rate 3,000 Federal tax withholding from salaries 10,000 Compute their AGI, taxable income, tax liability, and federal tax refund or amount due.

Answer 1

Particulars	Amount	Amount
Gross income:
Salary	$        122,000
Dividends	$            6,000
Capital gains	$            3,000
Gross income		$        131,000
For AGI deductions		$          15,000
Adjusted gross income		$        116,000
Less:
Standard deduction	$          25,700
Itemized deduction	$          25,000
Higher of the two		$          25,700
Taxable income		$          90,300
Ordinary rate income		$          87,300
Income tax liability regular		$    10,923.00
[ 9086 + ( 87300 - 78950 ) × 0.22 ]
Tax on dividends		450.00
Total tax liability		$    11,373.00
Payments:
Withholding	$          10,000
Child tax credit	$                   -
Total payments		$          10,000
Federal tax due		$            1,373