Marvin, age 67, and Joanne age 66 are married. They have one dependent grandchil
ID: 2513319 • Letter: M
Question
Marvin, age 67, and Joanne age 66 are married. They have one dependent grandchild, Jimmy, age 10, who lived with them all year. Their itemized deductions total $13,400. They incurred a capital loss of $6,500 from the sale of 1BM Co. stock. They want to file a joint 2017 Federal Income Tax return Their income is as follows Marvin - 1) 2) $11,500 in pension income with $3,000 income tax withholdings $14,000 in social security benefits Joanne- 1) 2) 3) Wages from employment $20,000 with $1,500 income tax withholdings Gambling winnings $3,000 Interest from Regions Bank $85 Compute, in detail, a) the adjusted gross income, b) the taxable income and c) the 2017 income tax and d) indicate the amount, if any, of refund or taxes dueExplanation / Answer
Particulars
Amount ($)
Pension income of Marvin
11500
Social security benefits
14000
Wages of Joanne from employment
20000
Gambling winnings
3000
Interests from banks
85
Adjusted gross income (AGI)
48585
Particulars
Amount ($)
Pension income of Marvin
11500
Social security benefits
14000
Wages of Joanne from employment
20000
Gambling winnings
3000
Interests from banks
85
Adjusted gross income (AGI)
48585
Less: Itemized deductions
13400
Taxable income
35185
For joint income tax returns tax rates are as following
Up-to $18650 @10%
1865
From $18651 to $35185 @15%
2480.1
Income tax liability
4345.1
Income tax withheld
From:
Marvin
3000
Joanne
1500
Income tax withheld in total
4500
Less: Income tax liability
4345.1
Income tax to be refunded to Marvin and Joanne
154.9
Particulars
Amount ($)
Pension income of Marvin
11500
Social security benefits
14000
Wages of Joanne from employment
20000
Gambling winnings
3000
Interests from banks
85
Adjusted gross income (AGI)
48585