alculate the child tax credit for the following taxpayers. Round any division "up" to the nearest...

alculate the child tax credit for the following taxpayers. Round any division "up" to the nearest whole number. a. Jeremy is a single (head of household) father with $80,100 of AGI and has a dependent 8-year-old son: $ b. Jerry and Ann have $100,000 of AGI, file jointly, and claim two dependent preschool children: $ c. James and Apple have AGI of $118,250, file jointly, and claim two dependent children (ages 7 and 10): $

Expert Solution

a)

Jerry's AGI is $5,100 (80,100 - 75,000) above the threshold limit specified for single (head of household) for the year 2017. Therefore, the maximum deduction of $1,000 will be phased out for every $1,000 in excess of $75,000 by an amount of $50.

The value of phase out amount and child tax credit is determined as below:

Phaseout Amount = Excess Amount/1,000 = 5,100/1,000 = 5.1 rounded off to 6*50 = $300

Child Tax Credit = Maximum Tax Credit - Phaseout Amount = 1,000 - 300 = $700

b)

As the AGI is less than eligible/threshold limit of $110,000 specified for married individuals filing jointly, the couple will be entitled to claim the maximum tax credit of $1,000 per child.

Child Tax Credit = Maximum Amount Per Child*2 = 1,000*2 = $2,000

c)

Couple's AGI is $8,250 (118,700 - 110,000) above the threshold limit specified for married individuals filing jointly for the year 2017. Therefore, the maximum deduction of $1,000 will be phased out for every $1,000 in excess of $110,000 by an amount of $50.

The value of phase out amount and child tax credit is determined as below:

Phaseout Amount = Maximum Tax Credit Amount/1,000 = 8,250/1,000 = 8.25 rounded off to 9*50 = $450

Child Tax Credit = Maximum Tax Credit*2 - Phaseout Amount = 1,000*2 - 450 = $1,550

ekkarill92 answered 2 years ago

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