Question

Marc and Michelle are married and earned salaries this year of $69,600 and $14,100, respectively. In addition to their salaries, they received interest of $350 from municipal bonds and $1,200 from corporate bonds. Marc contributed $3,200 to an individual retirement account, and Marc paid alimony to a prior spouse in the amount of $2,200. 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 $7,400 of expenditures that qualify as itemized deductions and they had a total of $6,340 in federal income taxes withheld from their paychecks during the course of the year

1. What is Marc and Michelle’s gross income?

2.What is Marc and Michelle’s adjusted gross income?

3. What is the total amount of Marc and Michelle’s deductions from AGI?

4. What is Marc and Michelle’s taxable income?

5.What is Marc and Michelle’s taxes payable or refund due for the year?

Answer 1

Answer :-

No.	Particulars	Amount
1.	Marc and Michelle’s gross income :-
	Gross income	=  $69,600 + $14,100 + $1,200 = $84,900
2.	Marc and Michelle’s adjusted gross income :-
	Adjusted gross income	= $84,900 - $3,200 -  $2,200 = $79,500
3.	Total amount of Marc and Michelle’s deductions from AGI :-
	Standard deduction	$11,900 [ married filing jointly ]
	Itemized deductions	$7,400
	Personal and dependency exemptions	$11,400 [ 3,800 * 3 ]
	Total deductions from AGI	= $11,900 + $11,400 = $23,300
4.	Marc and Michelle’s taxable income :-
	Taxable income	= $79,500 - $23,300 = $56,200
5.	Marc and Michelle’s taxes payable or refund due for the year :-
	Income tax liability [ from the tax rate schedule for married filling jointly ]	= $1,740+(49,200 - 17,400) x 15% = $1,740 + [ 31,800 * 15% ] = $1,740 + 4,770 = $6,510
	Credits	$2,000
	Prepayments	$6,340
	Taxes refund due for the year	= $6,510 - $2,000 - $6,340 = $6,510 - 8,340 = - $1,830