Question

Marc and Michelle are married and earned salaries this year of $68,000 and $13,500, respectively. In addition to their salaries, they received interest of $350 from municipal bonds and $1,000 from corporate bonds. Marc contributed $3,000 to an individual retirement account, and Marc paid alimony to a prior spouse in the amount of $2,000. 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 $7,000 of expenditures that qualify as itemized deductions and they had a total of $6,100 in federal income taxes withheld from their paychecks during the course of the year. (Use the 2018 tax rate schedules.)

A) What is Marc and Michelle's gross income? $82,500

B) What is Marc and Michelle's adjusted gross income? $5,000

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?

Please answer C-E, and use tax information from 2018.

Answer 1

S.no	Discription	Computation	Amount($)
1.	Gross income	Marc and Michelle's salaries+corporate bond interest=$68000+$13500+$1000	82,500
2.	For AGI Deduction	Individual retirement ammount+ alimony paid= 3000+2000	5000
3.	Adjusted Gross Total Income	Gross income- AGI Deductions= 82500-5000	77,500
4.	Standard Deduction	Married filling jointly	12,200
5.	Itemized Deductions		7,000
6.	Greater of Itemized OR Standard Deduction	consider higher value in both deductions	12,200
7.	Personal and Dependency Expenses	Two personal and one dependency exemption= 3900*3	11,700
8.	Total Deduction from AGI	Greater of Itemized or Standard Deductions+ personal and Dependency Expenses= 12200+11700	23,900
9.	Taxable Income	Adjusted Gross Total Income-Total Deductiond from AGI= 77500-23900	53,600
10.	Income Tax Payable	18650-10%=1865 (53600-18650)*15%=5242.5 There fore, 5242.5-1865	7107.5
11.	Held Federal Income Tax		6,100
12.	Chiled Tax Credit for MATHEU		2,000
13.	Tax Refund	Held federal income tax+ Chiled tax credit-Income Tax payable	992.5

This the answer for above question.