Can you please tell me how I'm coming up with the wrong answer for taxable income and total tax liability? I have solved most of the problem but I keep getting the wrong answer on this one.
Blake and Valerie Meyer (both age 30) are married with one dependent child Blake's gross salary from his corporate employer was $70,000, and his Section 401(k) contribution was $6,300. Valerie's salary from GuiTech, an S corporation, was $29,400 Valerie owns 16 percent of GuiTech's outstanding stock. Her pro rata share of GuiTech's ordinary business income was $13,790, her pro rata share of GuiTech's net loss from rental real estate was $8.100. and she received a $7.000 cash distribution from GuiTech. The ordinary income from GuiTech is qualified business Blake received a $15,000 cash gift from his grandmother. Valerie won $6,400 in the Maryland state lottery. The Meyers received a distribution from their investment in Pawnee Mutual Fund that consisted of a $712 qualifying dividend and a $3,020 long-term capital gain. Blake paid $12,000 alimony to a former spouse under a divorce agreement executed in 2011. The Meyers paid $14,200 home mortgage interest on acquisition debt and $2, 780 property tax on their personal residence The Meyers paid $7,000 state income tax and $4,200 state and local sales tax. Valerie contributed $1,945 to the First Baptist Church. Blake Salary $ 70,000.00 401K Contribuion $ (6,300.00) Valerie Salary $ 29,400.00 Share of Guitech Income $ 13,790.00 Share of Guitech loss $ (8,100.00) Lottery Winnings $ 6,400.00 Qualified Dividend payout 712.00 Capital Gain $ 3,020.00 Alimony Paid Adjusted Gross Income [AGI] $(12,000.00) $ 96,922.00 Mortgage interest $(14,200.00) Property Tax $ (2, 780.00) Charity Contribution $ (1,945.00 State Income tax paid $ (7,000.00) Qualified Business Income 5 (2,758.00) Itemized Deductions $(28,683.00) Standard Deduction for Married filing Joint $(24,000.00 Taxable Income $ 68,239.00 Child Credit $ (2,000.00) Tax on Capital Gains & Qualifying Dividends - 096 $ Tax on Ordinary Income ($64,507) $ 7,359.84 Regular Income Ta $ 5,359.84 Married Filing Joint 12% of excess over $19,050 + $1,905.00 AMI Total Tax Liability (including AM $ 5,359.84