Question

Marc and Michelle are married and earned salaries this year of $64,800 and $12,300, respectively. In addition to their salaries, they received interest of $350 from municipal bonds and $600 from corporate bonds. Marc contributed $2,600 to an individual retirement account, and Marc paid alimony to a prior spouse in the amount of $1,600. 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 $6,200 of expenditures that qualify as itemized deductions and they had a total of $5,600 in federal income taxes withheld from their paychecks during the course of the year.

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?

    

Answer 1

Question	Particulars	Amount	Amount
a	Gross income:
	Salary	77,100
	Bond interest	600
	Gross income		77,700
	For AGI deductions		4,200
b	AGI		73,500
	Less:
	Standard deduction	24,000
	Itemized deduction	6,200
c	Higher of the two		24,000
d	Taxable income		49,500
	Income tax liability		5,559.00
	Payments:
	Withholding	5,600
	Non-refundable credits	2,000
	Total payments		7,600.00
e	Refund due		2,041.00