Question

In: Accounting

Mr. and Mrs. Lovejoy are married with no dependent children. Mr. Lovejoy worked for Smart Tech...

Mr. and Mrs. Lovejoy are married with no dependent children. Mr. Lovejoy worked for Smart Tech Corporation January through March and for Computer Associates the remainder of the year. Mrs. Lovejoy finished her degree in November and immediately began as an associate with Smith and Weber. They report the following information for 2018. Use Individual Tax Rate Schedules and Standard Deduction Table.

Standard Deduction Table

Mr. Lovejoy’s salary from Smart Tech $ 32,000
Mr. Lovejoy’s salary from Computer Associates 142,000
Mrs. Lovejoy's salary from Smith and Weber 15,550
Interest from savings account 700
Itemized deductions 9,000
Dividends eligible for 15% rate 2,200
  1. Compute AGI.
  2. Compute taxable income.
  3. Compute net tax liability (after credits).

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