Marc and Michelle are married and earned salaries this year of $67,600 and $13,3
ID: 2329175 • Letter: M
Question
Marc and Michelle are married and earned salaries this year of $67,600 and $13,350, respectively. In addition to their salaries, they received interest of $350 from municipal bonds and $950 from corporate bonds. Marc contributed $2,950 to an individual retirement account, and Marc paid alimony to a prior spouse in the amount of $1,950. 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 $6,900 of expenditures that qualify as itemized deductions and they had a total of $5,950 in federal income taxes withheld from their paychecks during the course of the year. (Use the tax rate schedules.)
a. What is Marc and Michelle's gross income? Description Amount Gross income 0Explanation / Answer
Computation of Gross Income for Marc and Michelle for the financial year:
Particulars $ Salary of Marc 67,600 Salary of Michelle 13,350 Interest received from Municipal bonds Exempt Interest received from Corporate bonds 950 Adjusted Gross Income (AGI) 81,900 Less: Deduction from AGI: Contribution to individual retirement account (2,950) Alimony to prior spouse (1,950) Child's tax credit (2,000) Itemised deduction (6,900) Total Taxable income 68,100