Answer:
A) $76500
B) $72500
C) $24750
D) tax refund of $260
Explanation:
A) calculate Marc and Michelle's gross income
Marc salary = $64000
Michelle's salary = $12000
interest from corporate bond = $ 500
Hence gross income = 64000 + 12000 + 500 = $76500
B) Calculate Marc and Michelle's Adjusted gross income
Gross income = $76500
qualifying moving expenditure = $2500
Alimony paid to previous spouse = $1500
adjusted gross income = 76500 - 2500 - 1500 = $72500
C) Calculate the total amount of Marc and Michelle's deductions from AGI
Standard deduction = $12600
itemized deduction = $6000
personal and dependency allowance = $12150
<em>To calculate the Deductions from AGI we have to add the personal and dependency allowance to the standard deduction ( higher value between standard deduction and itemized deduction )</em>
= 12600 + 12150 = $24750
D ) calculate Marc and Michelle's taxable income
Adjusted gross income = $72500
deduction from itemized deduction = $24750
taxable income = 72500 - 24750 = $47750
E) Determine if Marc and Michelle's taxes payable or refund due for the year
Tax rate schedules :
between $18451 to $79000 : tax rate = $1845 + 15% of income over $18450
Taxable income = $47750
Tax liability = 1845 + (47750 - 18450) * 15% = $6240
child tax credit = $1000
prepayment of taxes = $5500
Tax refund = tax liability - child tax - prepayment of taxes
6240 - 1000 - 5500 = $260
<em>hence there will be a tax return of $260</em>
