Individual Income Tax Formula . Your Turn! Xavier and his spouse earned $95,000

Question

Individual Income Tax Formula . Your Turn! Xavier and his spouse earned $95,000 in salary and $8,000 in interest income duringg 2018. Their employers withheld $10,000 of federal income taxes from their paychecks during the year. They have one qualifying dependent child who lives with them. They plan to file married filing joint and have $25,000 in itemized deductions and $2,000 for the child tax credit. Determine the tax refund or taxes due. 4-20

Explanation / Answer

Salary and wages 95000 Add: Interest 8000 Gross Income 103000 Less: Deductions for AGI 0 AGI 103000 Less: Satndard deduction or Itemized deduction, higher one 25000 (25000>24000 Std. Ded) Taxable Income 78000 Tax on above: 0-19050 x 10% = 1905 19050-77400 x 12% 7002 78000-77400 x 22% 132 Total tax $        9,039 Tax withheld 10000 Less: Non refundable child tax credit 600 Refundable child tax credit 1400 Total tax $        8,439 Total paid 11400 $    2,961 Tax Refund A B B-A

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