Question
In: Accounting
Mark and Patricia report adjusted gross income of $410,000 and itemized deductions of $31,000 for the...
Mark and Patricia report adjusted gross income of $410,000 and itemized deductions of $31,000 for the interest on their home acquisition mortgage (principal amount of $890,000 acquired in 2015), $14,000 in state and local taxes, and $38,000 in charitable contributions. They file a joint income tax return and have four dependent children under age 16. What is their taxable income for 2019 and allowable tax credits?
Solutions
Expert Solution
Taxes deduction limited to 10,000
Itemized deductions = 31,000 + 10,000 + 38,000 = 79,000
| Particulars | Amount | Amount |
| Gross income: | ||
| Salary | $ 410,000 | |
| Dividends | $ - | |
| Capital loss deduction | $ - | |
| Gross income | $ 410,000 | |
| For AGI deductions | $ - | |
| Adjusted gross income | $ 410,000 | |
| Less: | ||
| Standard deduction | $ 24,400 | |
| Itemized deduction | $ 79,000 | |
| Higher of the two | $ 79,000 | |
| Taxable income | $ 331,000 | |
| Income tax liability | $ 68,553.00 | |
| [ 65497 + ( 331000 - 321450 ) × 0.32 ] |
Taxable income is 331,000.
Allowable tax credits = 2,000 per child * 4 = 8,000
ekkarill92 answered 2 years agoRelated Solutions
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Data are given below on the adjusted gross income x and the amount of itemized deductions...
Data are given below on the adjusted gross income x and
the amount of itemized deductions taken by taxpayers. Data were
reported in thousands of dollars. With the estimated regression
equation = 4.68 + .16x, the point estimate of a
reasonable level of total itemized deductions for a taxpayer with
an adjusted gross income of $52.5 thousand is $13.08
thousand.
Adjusted Gross Income ($1000s)
Reasonable
Amount of
Itemized Deductions ($1000s)
22
9.6
27
9.6
32
10.1
48
11.1
65
13.5
85...
Data are given below on the adjusted gross income x and the amount of itemized deductions...
Data are given below on the adjusted gross income x and
the amount of itemized deductions taken by taxpayers. Data were
reported in thousands of dollars. With the estimated regression
equation = 4.68 + .16x, the point estimate of a
reasonable level of total itemized deductions for a taxpayer with
an adjusted gross income of $52.5 thousand is $13.08
thousand.
Adjusted Gross Income ($1000s)
Reasonable Amount of
Itemized Deductions ($1000s)
22
9.6
27
9.6
32
10.1
48
11.1
65
13.5
85...
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