Marc and Michelle are married and earned salaries this year of $68,000 and $13,5

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.

Explanation / Answer

18650-10%=1865

(53600-18650)*15%=5242.5

There fore,

5242.5-1865

This the answer for above question.

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

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