Question

Edit question Marc and Michelle are married and earned salaries this year of $67,600 and $13,350, respectively. In addition to their salaries, they received interest of $350 from municipal bonds and $950 from corporate bonds. Marc contributed $2,950 to an individual retirement account, and Marc paid alimony to a prior spouse in the amount of $1,950. Marc and Michelle have a 10-year-old son, Matthew, who lived with them throughout the entire year. Thus, Marc and Michelle are allowed to claim a $2,000 child tax credit for Matthew. Marc and Michelle paid $6,900 of expenditures that qualify as itemized deductions and they had a total of $5,950 in federal income taxes withheld from their paychecks during the course of the year. (Use the tax rate schedules.) a. What is Marc and Michelle’s gross income? b. What is Marc and Michelle’s adjusted gross income? c. What is the total amount of Marc and Michelle’s deductions from AGI? d. What is Marc and Michelle’s taxable income? e. What is Marc and Michelle’s taxes payable or refund due for the year? Use 2018 tax schedules

Answer 1

Question	Particulars	Amount	Amount
a	Gross income:
	Salary	80,950
	Business income
	Capital gains and interest	950
	Gross income		81,900
	For AGI deductions		4,900
b	AGI		77,000
	Less:
	Standard deduction	24,000
	Itemized deduction	6,900
c	Higher of the two		24,000
d	Taxable income		53,000
	Income tax liability		5,979.00
	Payments:
	Withholding	5,950
	Child tax credit	2,000
	Total payments		7,950.00
e	Refund due		1,971.00