Tobias has a wife and child (Emily) who live with him full-time. Emily is his biological...

Tobias has a wife and child (Emily) who live with him full-time. Emily is his biological child and is age 13. He and his wife file as Married Filing Jointly. In 2018, Tobias and his wife (she earned $10,000) had $78,000 in total income. After accounting for numerous deductions, etc. (but before accounting for tax credits) Tobias estimates that his federal income tax for the year will be $6,950. Given this limited information, how much do you believe this tax bill will be after accounting for any tax credit(s)?

Group of answer choices

$6,450

$1,550

$4,950

$450

Solutions

Expert Solution

Ans: The correct option is $4950.

To claim child tax credit, the taxpayers must have at least one child as their dependent younger than age 17 on the last day of the tax year (Dec 31) The child can either be a student or he or she must not provide more than half of their own support for the year. The child must be claimed a s a dependent by the Taxpayers in their return.

The maximum amount of child tax credit if you have a dependent child is $2000 per qualifying child from 2018 onwards.This limit was $1000 earlier. Also, the taxpayers must have earned income of $2500 or more to claim child tax credit

Here, Tobias has a wife and child (Emily) who live with him full-time. Emily is his biological child and is age 13. He and his wife file as Married Filing Jointly. In 2018, Tobias and his wife (she earned $10,000) had $78,000 in total income. After accounting for numerous deductions, etc. (but before accounting for tax credits) Tobias estimates that his federal income tax for the year will be $6,950.

the child tax credit will be deducted from their tax liability as they have a child who is 13 years old and it is assumed that they have claimed their child as a dependent. So, they will be eligible for a child tax credit of $2000.

After Child tax credit, their tax bill will be $4950 ($6950 - $2000)

ekkarill92 answered 1 year ago

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