Bruce and Anna Wayne

3 children living at home under the age of 17

$78,000 gross annual combined salaries

$2,000 invested in Bruce's IRA during the year

$580 in a savings account interest

$400 in dividends from Bats Inc

300 shares of stock sold for $27 per share on July 2, this year (plus a $50 brokerage

commission).  The stock was purchased for $10 per share 1 year ago (plus a

$50 brokerage commission).

$4,300 in medical expenses

$9,000 in home mortgage interest

$3,000 given to charity

$2,500 paid in state income taxes

$1750 paid in local property taxes

$7,460 Federal Income tax withheld during the year

Question 1

What is the Wayne's gross income?

$83,980

$78,980

$87,030

$83,000

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Question 2

What is their adjusted gross income?

$81,980

$76,980

$81,000

$83,980

Question 3

Will the Wayne's itemize or take the standard deduction? If so, show the correct amount for whichever one they choose.

They will choose the itemized deduction of $16,250 as it is higher than the standard deduction of $12,700.

They will choose the itemized deduction of $20,550 as it is higher than the standard deduction of $12,700.

They will choose the standard deduction of $12,700 as it is higher than the itemized deduction of $8,198.

They will choose the itemized deduction of $18,099 as it is higher than the standard deduction of $12,700.

Question 4

What is their taxable income (on ordinary income), and how much total Federal income tax do they owe (via ordinary and investment invome)? (Remember to take the capital gains and dividends out, calculate taxes owed, and then tax them at the applicable rate and add the tax due to that due on ordinary income.)

Their taxable income is $40,080 and they owe $5,079.50 in federal income taxes.

Their taxable income is $45,980 and they owe $6,940 in federal income taxes.

Their taxable income is $49,330 and they owe $6,190 in federal income taxes.

Their taxable income is $42,830 and they owe $5,920 in federal income taxes.

Question 5

Do they still owe the government money or will they receive a refund?  If so, how much do they owe?

They owe the government $4,473.50

They receive a refund of $5,380.50

They do not owe the government money nor will they receive a refund.

They will receive a refund of $1,270.50.

Please include how you got the answer, so that I may understand this better.