2019

The Tax Formula for Individuals, Filing Status and Tax Computation, Define qualifying dependents, The Standard Deduction (LO 1.3, 1.5, 1.7)

Jim, age 50, and Martha, age 49, are married with three dependent children. They file a joint return for 2019. Their income from salaries totals $49,500, and they received $10,125 in taxable interest, $5,000 in royalties, and $3,000 in other ordinary income. Jim and Martha's deductions for adjusted gross income amount to $3,200, and they have itemized deductions totaling $18,200.

Table for the standard deduction

Filing Status	Standard Deduction
Single	$ 12,200
Married, filing jointly	24,400
Married, filing separately	12,200
Head of household	18,350
Qualifying widow(er)	24,400

Click here to access the tax tables.

Calculate the following amounts:

a. Gross income	67,625
b. Adjusted gross income	64,425
c. Itemized deduction or standard deduction amount	24,400
d. Taxable income	40,425
e. Income tax liability (before any credits)