Richard and Jennifer were married in 2011. They have a five-year-old child and a son born...

Richard and Jennifer were married in 2011. They have a five-year-old child and a son born November 15, 2020. Richard's 67 year-old father lived in a nursing home until his death on May 23, 2019. Richard and Jennifer provided all of his support until his death. Richard earned $43,000 in salary during the year. They also received $2,100 in interest from the credit union. They incurred $17,000 in itemized deductions during the year. Compute Richard and Jennifer's income tax for 2020 using the Tax Rate Schedules. Please show works.

Expert Solution

Solution:

Salary	$43,000.00
Interest	$2,100.00
AGI	$45,100.00
Standarized deduction	$(24,800.00)
Taxable income	$20,300.00
Fixed amount (A)	$19,75.00
Excess of $9,875	$550.00
Tax rate	12%
Tax of the excess (B)	$66.00
Total Tax Due (A+B)	$2,041.00

Note:

Marginal Rates: For tax year 2020

12% for incomes over $9,875 ($19,750 for married couples filing jointly).
The lowest rate is 10% for incomes of single individuals with incomes of $9,875 or less ($19,750 for married couples filing jointly).
So Here fixed amount = $19,750 × 10% = $1,975

ekkarill92 answered 3 years ago

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