Question
Barb and Barney are married and file a joint return. They have two children, Lulu and Zoe, that live at home and whom they fully
Barb and Barney are married and file a joint return. They have two children, Lulu and Zoe, that live at home and whom they fully support. Lulu is 9 and Zoe is 13 years old. In order for Barb and Barney to both work, they pay care providers to take care of Lulu and Zoe after school. The total care cost for the year were: Lulu $4,800, and Zoe $3,800. During the year Barb earned salary of $24,500 and Barney earned salary of $25,000 and they each made a deductible $5,000 contribution to a traditional spousal IRA. Neither Barb nor Barney are covered by qualified plans at work. Calculate the dollar amount of Barb and Barneys tax credit for child and dependent care expenses. Show your work including all calculations.
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