Marc and Michelle are married and earned salaries this year of $64,000 and $12,0
ID: 2419093 • Letter: M
Question
Marc and Michelle are married and earned salaries this year of $64,000 and $12,000, respectively. In addition to their salaries, they received interest of $350 from municipal bonds and $500 from corporate bonds. Marc and Michelle also paid $2,500 of qualifying moving expenses, and Marc paid alimony to a prior spouse in the amount of $1,500. 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 $1,000 child tax credit for Matthew. Marc and Michelle paid $6,000 of expenditures that qualify as itemized deductions and they had a total of $5,500 in federal income taxes withheld from their paychecks during the course of the year.
E. What is Marc and Michelle’s taxes payable or refund due for the year? (Round your answer to 2 decimal places.)
[The following information applies to the questions displayed below.]Marc and Michelle are married and earned salaries this year of $64,000 and $12,000, respectively. In addition to their salaries, they received interest of $350 from municipal bonds and $500 from corporate bonds. Marc and Michelle also paid $2,500 of qualifying moving expenses, and Marc paid alimony to a prior spouse in the amount of $1,500. 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 $1,000 child tax credit for Matthew. Marc and Michelle paid $6,000 of expenditures that qualify as itemized deductions and they had a total of $5,500 in federal income taxes withheld from their paychecks during the course of the year.
b.
A. What is Marc and Michelle’s gross income?
B.What is Marc and Michelle’s adjusted gross income?
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? (Round your answer to 2 decimal places.)
2015 tax rate schedule INSERT1 Schedule X- Single Schedule Z-Head of Household If taxable income 3 over. If taxable income i Butnot over Butnot over The tax is 10% of taxable income $922.50 plus 15% of the excess over $9,225 $5,156.25 plus 25% of the excess over $37,450 $18,481.25 plus 28% of the excess over $90,750 $46,075. 25plus 33% of the excess over $189,300 $119,401.25 plus 35% of the excess over $411,500 $119,996.25 plus 39.6% of the excess over $413,200 The tax is 10% of taxable income $1,315.00 plus 15% of the excess over $13,150 $6,872.50 plus 25% of the excess over $50,200 $26,722.50 plus 28% of the excess over $129,600 $49,192.50 plus 33% of the excess over $209,850 $115,737.00 plus 35% of the excess over $411,500 $125,362.00 plus 39.6% of the excess over $439,000 over SO 9,225 S37,450 90,750 S189.300 $411,500 $413,200 S37,450 $90.750 | S 189.300 | S41 1,500 | $13,150 S50-200 | $129,600 $209.850 | S41 1,500 $439,000 $13,150 S129.600 $209,850 $411,500 S439,000 S41 3.200 Schedule Y-1-Married Fil intly of Qualifying Widower) Schedule Y-2- Married Filing Separatel If taxable income 3 over. If taxable income is But not over But not over The tax is 10% of taxable income $1,845.00 plus 15% of the excess over $18,450 $10,312.50 plus 25% of the excess over $74,900 $29,387.50 plus 28% of the excess over $151,200 $51,577.50plus 33% of the excess over $230,450 $111,324.00 plus 35% of the excess over $411,500 $129,996.50 plus 39.6% of the excess over $464,850 The tax is 10% of taxable income $922.50 plus 15% of the excess over $9,225 $5,156.25 plus 25% of the excess over $37,450 $14,693.75 plus 28% of the excess over $75,600 S25,788.75plus 33% of the excess over $115,225 $55,662.00 plus 35% of the excess over $205,750 $64,998.25 plus 39.6% of the excess over $232,425 over S0 S18,450 $74,900 151,200 S18,450 $74.900 | 9.225 S37,450 S 75.600 | S0 S37,450 575,600 $115,225 $205.750 S232,425 $151 $115 $230,450 | S41 1,500 $464.850 S205.750 | $232,425 | $411,500 5464,850Explanation / Answer
Married filing jointly
11,400
(22,350)
$50,150
$6,688
$6,688
$188
A.$76,500.
B. $72,500.
C.$22,350
D.$50,150
E.$188 taxes payable.
Description Amount Computation (1) Realized income from all sources $76,850 64,000 salary + 12,000 salary + 350 municipal bond interest + 500 corporate bond interest (2) Excluded or deferred income 350 Nontaxable municipal bond interest (3) Gross income 76,500 (1) – (2) (4) For AGI deductions 4,000 2,500 qualified moving expenses + 1,500 alimony paid (5) Adjusted gross income 72,500 (3) – (4) (6) Standard deduction 11,400Married filing jointly
(7) Itemized deductions 6,000 (8) Greater of standard deductions or itemized deductions11,400
(6) > (7) (9) Personal and dependency exemptions 10,950 3,650 x 3 (two personal exemptions and one dependency exemption) (10) Total deductions from AGI(22,350)
(8) + (9) (11) Taxable income$50,150
(5) + (10) (12) Income tax liability$6,688
(50,150 – 16,700) x 15% + 1,670 (see tax rate schedule for married filing jointly) Amount rounded to whole dollar. (13) Other taxes 0 (14) Total tax$6,688
(12) + (13) (15) Credits (1,000) Child credit for 10-year old son Matthew (16) Prepayments (5,500) Taxes payable with return$188
(14) + (15)+ (16)