Calculating Individual Income Tax Liability

Mike (age 40) and Molly (age 38) are married and have three children ages 5, 10, and 13. Their salaries for the year amounted to $91,375 and they received $3,750 of taxable interest income. Mike and Mollys deductions for adjusted gross income amounted to $3,150, and their itemized deductions were $13,250. Mike and Molly file a joint income tax return for 2017.

Calculate the following amounts (answer each question independently from all other questions):

Adjusted gross income (AGI). Show the calculation and label all amounts.

Will Mike and Molly take the Itemized deduction or standard deduction? Identify your selection and provide the amount of the one you choose. Explain why you chose the specific deduction.

Identify the number and type of exemptions. Also, provide the dollar amount for total exemptions.

Taxable income. Show the calculation (starting with AGI) and label all amounts.

Income tax liability (Do not consider alternative minimum tax) Will you use the tax tables or the tax rate schedule to calculate tax liability? Explain why you chose one over the other.

Be sure to write neatly! And clearly identify your answers.