Question

37) Carmen and Marie had the following income and deductions during 2018:

Salaries                                               $110,000

Interest income                                       5,000

Itemized deductions                               25,000

Taxes withheld during year                   11,000

Calculate Brad and Angie's tax liability due or refund. They file a joint tax return.

$0 tax due.

$679 tax due (liability).

$1,083 refund.

$1,083 tax due.

38) Husband and wife, who live in a common law state, are eligible to file a joint return for 2018, but elect to file separately. Wife has adjusted gross income of $30,000 and has $3,400 of expenditures which qualify as itemized deductions. Husband deducts itemized deductions of $15,500. What is the taxable income for the wife?

A) $16,000

B) $23,200

C) $26,600

D) None of the above.

Answer 1

37

Question	Particulars	Amount	Amount
a	Gross income:
	Salary	110,000
	Bond interest	5,000
	Gross income		115,000
	For AGI deductions		-
b	AGI		115,000
	Less:
	Standard deduction	24,000
	Itemized deduction	25,000
c	Higher of the two		25,000
d	Taxable income		90,000
	Income tax liability		11,679.00
	Payments:
	Withholding	11,000
	Non-refundable credits	-
	Total payments		11,000.00
e	Tax payable		679.00

38

Taxable income = AGI less itemized deduction = 30000-3400 = 26600