In: Accounting
3) Jane and Ed Rochester are married with a 2-year-old child, who lives with them and whom they support financially. In 2019, Ed and Jane realized the following items of income and expense: Amount Items:
$ 35,000 Ed's Salary, $70,000 Jane's Salary , $400 Municipal bond interest income, $1,000 Qualified business income, $8,000 Alimony paid (divorce in 2018) $10,000 Real property tax (from AGI deduction) Their employers withheld $5,800 in federal income taxes from their paychecks.
A) What is their AGI?
B)What is their Taxable Income?
A.) | AGI | ||
Amount in $ | |||
Ed's Salary | 35,000 | ||
Add: Jane's Salary | 70,000 | ||
Add: Municipal bond interest income | 400 | ||
Add: Qualified business income | 1,000 | ||
Gross Income | 106,400 | ||
Less: Alimony paid (divorce in 2018 ) | 8,000 | ||
Less: Real property tax | 10,000 | ||
AGI | 88,400 | ||
B.) | Taxable Income | ||
Amount in $ | |||
AGI | 88,400 | ||
Less: Standard Deduction | 24,400 | ||
Taxable Income | 64,000 | ||