Question

Country of Tax - United States - Form 1040

Paul is 66 years old and Tina is 62 years old. In 2019, they file a joint return. They support their 22-year-old son, Jed, who is a full-time student. He earns $4,000.00 per year as a waiter at a restaurant.

Wages............................................................... $ 170,000.00

Interest from savings.......................................... $12,000.00

Interest on NYS qualified bonds........................... $7,000.00

Inheritance from Tina’s Aunt Lucy....................... $6,000.00

Child support from Tina’s ex-husband Eric........ $10,000.00

Prize from contest at church.................................. $1,000.00

Paul and Tina own a house in Whitestone. The costs associated with the house were as follows:

Mortgage interest                               $7,000.00

    (Please note: The amount of the indebtedness is under $750,000.00.)

Real estate taxes                                 $8,000.00

They paid hospital bills of $7,000.00 and doctor’s bills of $6,000.00. Their medical insurance company reimbursed them in the amount of $3,000.00 for the doctor’s bills. They had prescriptions in the amount of $500.00 and a yearly vitamin expense of $200.00.

Their charitable contributions included:

$2,000.00 paid to St. Mary’s Church

$   500.00 paid to Mr. and Mrs. Elm (neighbors) whose house was damaged in a flood

1. What is Paul and Tina’s gross income?
2. What is Paul’s and Tina’s adjusted gross income ?
3. What is Paul and Tina’s standard deduction without regard to their itemized deductions?
4. What is Paul and Tina’s net itemized deduction ?
5. How much of the charitable donations are deductible?
6. What is Paul and Tina’s taxable income?
7. What is Paul and Tina’s tax liability?

Answer 1