Marc and Michelle are married and earned salaries this year of $68,000 and $13,500, respectively. In...

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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 fromcorporate bonds. Marc contributed $3,000 to an individualretirement account, and Marc paid alimony to a prior spouse in theamount of $2,000. Marc and Michelle have a 10-year-old son,Matthew, who lived with them throughout the entire year. Thus, Marcand Michelle are allowed to claim a $2,000 child tax credit forMatthew. Marc and Michelle paid $7,000 of expenditures that qualifyas itemized deductions and they had a total of $6,100 in federalincome taxes withheld from their paychecks during the course of theyear. (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 deductionsfrom AGI?
D) What is Marc and Michelle's taxable income?
E) What is Marc and Michelle's taxes payable or refund due forthe year?
Please answer C-E, and use tax information from 2018.

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3.8 Ratings (462 Votes)

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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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 fromcorporate bonds. Marc contributed $3,000 to an individualretirement account, and Marc paid alimony to a prior spouse in theamount of $2,000. Marc and Michelle have a 10-year-old son,Matthew, who lived with them throughout the entire year. Thus, Marcand Michelle are allowed to claim a $2,000 child tax credit forMatthew. Marc and Michelle paid $7,000 of expenditures that qualifyas itemized deductions and they had a total of $6,100 in federalincome taxes withheld from their paychecks during the course of theyear. (Use the 2018 tax rate schedules.)A) What is Marc and Michelle's gross income? $82,500B) What is Marc and Michelle's adjusted gross income? $5,000C) What is the total amount of Marc and Michelle's deductionsfrom AGI?D) What is Marc and Michelle's taxable income?E) What is Marc and Michelle's taxes payable or refund due forthe year?Please answer C-E, and use tax information from 2018.