Question

Compute taxable income, tax and amount either due to IRS or to be refunded from the IRS for 2019 tax return for Doug and Edith, a married couple.

Doug, age 42 and Edith, age 39, residents of The Bronx. They have three children, Frank, age 11, Gary, age 8 and Helen, age 3.

W-2 Information

                                    Salary              Withheld federal tax               Withheld state/city tax

Doug                           57,240             6,030                                       2,150

Edith                           53,970             5,825                                       1,900

Edith was in an accident in Feb. of 2019. Because of computer problems the hospital insisted on Doug giving them his credit card for services. The hospital charged 34,000 and six weeks later resolved the computer problem and issued a credit on the credit card of everything except a $350 deductible.

Doug and Edith lived in a rented apartment so there is no real estate tax or mortgage involved.

Their total charity for 2019 was $250.

They paid a baby-sitter $500 per week ($24,000 for 2019) to watch Helen all day and Frank and Gary when they get home from school. The baby-sitter does laundry and household chores while Helen sleeps.

Compute tax, married filing joint and amount due to IRS or to be refunded by IRS when they file their 2019 tax return.

Answer 1

Particulars	Amount	Amount
Salary
Doug		$          57,240
Edith		$          53,970
AGI		$        111,210
Less: itemized deductions
Medical expenses	$                350
Less: 7.5% of AGI	$           (8,341)
	$                   -
Add: state income tax -limit	$          10,000
Add: charity	$                250
Total itemized deductions	$          10,250
Standard deduction available	$          24,400	$         (24,400)
Taxable income		$          86,810
Tax applicable		$    10,815.20
[$9,086 + (86,810 - $78,950)×22%]
Less:
Child tax credit		$           (6,000)
Child care expenses credit
[$6,000 × 20%]		$              (1,200)
Federal tax withheld:
Doug		$           (6,030)
Edith		$           (5,825)
Net tax refund		$ 8,239.80

refund is due.