Question

In 2020, John and Emma, married filing joint taxpayers, have adjusted gross income of $430,000. Their AGI includes $10,000 of interest income. They have no dependents and have $50,000 of itemize deductions. What is their 2020 federal income tax?

A) $83,631 B) $83,829 C) $89,212 D) $89,404

Answer 1

An itemized deduction is an expenditure on eligible products, services, or contributions that can be subtracted from adjusted gross income (AGI) to reduce your tax bill. Such deductions permit taxpayers who qualify to potentially pay less in taxes than if they opted to take the standard deduction, a fixed dollar amount that varies only by filing status. Allowable itemized deductions, sometimes subject to limits, include such expenses as mortgage interest, charitable gifts, and unreimbursed medical expenses.

For married couples filing jointly, the deduction is $24,400 in 2019 and $24,800 in 2020. For single filers, the deduction is $12,200 in 2019 and $12,400 in 2020

The federal income tax system and some states have higher standard deductions for people who are at least 65 years old and for people who are blind. Under federal guidelines, if you are 65 or older and single or a head of household, your standard deduction goes up $1,650 for 2019. If you are married filing jointly and one of you is 65 or older, your standard deduction goes up $1,300. If both of you are 65 or older, the deduction increases by $2,600.

Total federal taxable income = $[(AGI - Itemaized Deduction - Stanedred Deduction] = $[(430,000 - 50,000 - 24,800] = $ 355,200

Federal Tax = $(355,200x23.60%) = $ 83,829

for percentage please follow the federal tax table for 2020.  

Correct answer is C.