Question

Compute the 2018 Federal income tax in the following cases.
All are residents of New York State.

Alan, single, lives by himself, income 145,000, Itemized deductions 9,500.

Bob, single lives with his brother who was fired from his job in 2016 and has not earned any money since then. Bob's income was 115,000 and itemized deductions of 21,000.

Chad and Doris, married, no children or dependents.  
Income itemized deductions
Chad 125,000 31,000
Doris 135,000 4,500
Compute tax for Chad and Doris using married joint and married separate tax tables.

Ed, single earns 82,355 and had itemized deductions of 9,200.

Please show work

Sorry this is all my professor gave me in the email.

Answer 1

Alan:

Income = 145,000

Itemized Deductions = 9,500. Since Itemized deduction is less than standard deduction, we will use standard deduction.

Standard deduction = 12,000

Taxable Income = 145,000 - 12,000 = 133,000

Tax @ 24% = (133,000 - 82,500) + 14,089.5

= 50,500*24% = 12,120 + 14,089.5 = $26,209.5

Chad and Doris (Married Filing Jointly):

Income = 125,000 + 135,000 = $260,000

Itemized Deductions = 31,000 + 4,500 = $35,500

Taxable Income = $260,000 - $35,500 = $224,500

Tax @ 24% = (224,500 - 165,000) + 28,179

= 59,500*24% = 14,280 + 28,179 = $42,459

Chad and Doris (Married Filing separate):

Income = 125,000 + 135,000 = $260,000

Itemized Deductions = 31,000 + 4,500 = $35,500

Taxable Income = $260,000 - $35,500 = $224,500

Tax @ 35% = (224,500 - 200,000) + 45,689.5

= 24,500*35% = 8,575 + 49,685.5 = 54,264.5

Ed:

Income = 82,355

Itemized Deductions = 9,200. Since Itemized deduction is less than standard deduction, we will use standard deduction.

Standard deduction = 12,000

Taxable Income = 82,355 - 12,000 = 70,355

Tax @ 22% per tax tables = 11,422