Question

- Xavier, age 20, is a full-time college student with earned income from wages of $6,000 and interest income of $1,250. Xavier's parents provide more than half of Xavier's support. Xavier's 2018 taxable income is

A) $0.

B) $550.

C) $900.

D) $6,900.

- Akiko, a single taxpayer, had the following income and deductions during 2018:

Salary                                                    $60,000

Interest on bank account                               500

Tax-exempt interest                                      250

Deduction for AGI                                     5,500

Itemized deductions                                14,000

Taxes withheld                                         5,500

Calculate Chris's tax liability due or refund.

$1,010.50 tax liability.

$1,010.50 refund.

$549.50 tax liability.

$549.50 refund.

Answer 1

Xavier taxable income is $0 as his total income of $7,250 is less than standard deduction of $12,000.

Akiko

Particulars	Amount	Amount
Gross income:
Salary	60,000
Bond interest	500
Gross income		60,500
For AGI deductions		5,500
AGI		55,000
Less:
Standard deduction	12,000
Itemized deduction	14,000
Higher of the two		14,000
Taxable income		41,000
Income tax liability		4,959.50
Payments:
Withholding	5,500
Non-refundable credits	-
Total payments		5,500.00
Refund due		540.50