Question

1. Jeremy earned $200,000 in salary and $5,000 in interest income during the year. Jeremy has two qualifying dependent children who live with him. He qualifies to file as head of household and has $17,500 in itemized deductions. Neither of his dependents qualifies for the child tax credit. (use the 2017 tax rate schedules.). (Do not round intermediate calculations. Round "Income tax liability" to 2 decimal places.)

a. Use the 2017 tax rate schedules to determine Jeremy’s taxes due.

Description

(1)   Gross income $ ?
(2)   For AGI deductions $ ?
(3)   Adjusted gross income $ ?
(4)   Standard deduction $ ?
(5)   Itemized deductions $ ?
(6)    Greater of standard deductions or itemized deductions $ ?
(7)   Personal and dependency exemptions $ ?
(8)   Taxable income $ ?
  Income tax liability $ ?

b. Assume that in addition to the original facts, Jeremy has a long-term capital gain of $9,500. What is Jeremy’s tax liability including the tax on the capital gain?

Description

(1)   Gross income $ ?
(2)   For AGI deductions $ ?
(3)   Adjusted gross income $ ?
(4)   Standard deduction $ ?
(5)   Itemized deductions $ ?
(6)    Greater of standard deductions or itemized deductions $ ?
(7)   Personal and dependency exemptions $ ?
(8)   Taxable income $ ?
  Income tax liability $ ?

c. Assume the original facts except that Jeremy had only $6,000 in itemized deductions. What is Jeremy’s total income tax liability?

Description

(1)   Gross income $ ?
(2)   For AGI deductions $ ?
(3)   Adjusted gross income $ ?
(4)   Standard deduction $ ?
(5)   Itemized deductions $ ?
(6)    Greater of standard deductions or itemized deductions $ ?
(7)   Personal and dependency exemptions $ ?
(8)   Taxable income $ ?
  Income tax liability $ ?

Answer 1