Andy and Sally are married and under 50. They have 3 children under 12. They pay
ID: 2530177 • Letter: A
Question
Andy and Sally are married and under 50. They have 3 children under 12. They pay Sally's mom $200 a month for the entire year to care for the children.Sally's salary (Federal withholding $ 800) 8,000 Andy's salary (Federal withholding $500) 7,000
If they take a standard deduction, compute their taxable income: Andy and Sally are married and under 50. They have 3 children under 12. They pay Sally's mom $200 a month for the entire year to care for the children.
Sally's salary (Federal withholding $ 800) 8,000 Andy's salary (Federal withholding $500) 7,000
If they take a standard deduction, compute their taxable income: Andy and Sally are married and under 50. They have 3 children under 12. They pay Sally's mom $200 a month for the entire year to care for the children.
Sally's salary (Federal withholding $ 800) 8,000 Andy's salary (Federal withholding $500) 7,000
If they take a standard deduction, compute their taxable income:
Explanation / Answer
Particulars
Amount ($)
Sally’s salary
8000
Andy's salary
7000
Total income (105000 +3000)
15000
Less: Dependence allowance (200 x 12)
2400
12600
Less: Standard deduction (Married couple filing joint return)
12600
Being lower than $12700
Taxable income
0
The standard deduction allowed to married couple filling joint return is $12,700. However, since the income after deduction of dependence allowance is less than $12700 hence, the whole amount of such income would be allowed as standard deduction.
Particulars
Amount ($)
Sally’s salary
8000
Andy's salary
7000
Total income (105000 +3000)
15000
Less: Dependence allowance (200 x 12)
2400
12600
Less: Standard deduction (Married couple filing joint return)
12600
Being lower than $12700
Taxable income
0