Question
During all of 2018, Mr. and Mrs. Clay lived with their four children (all are under the age of 17). They provided over one-half of
During all of 2018, Mr. and Mrs. Clay lived with their four children (all are under the age of 17). They provided over one-half of the support for each child. Mr. and Mrs. Clay file jointly for 2018. Neither is blind, and both are under age 65. They reported the following tax-related information for the year: (Use the tax rate schedules)
Salary income $125,000
Prize from local radio station 1,500
Medical expenses (no health insurance) 4,000
Real estate taxes 4,200
Alimony paid by Mr. Clay (divorced in 2015) 12,000
State income taxes withheld in 2018 1,800
State income taxes paid with 2018 tax return (return was filed in April, 2019) 1,500
Federal income tax withholding 7,500
Qualified home mortgage interest (acquisition debt of $300,000) 15,000
Charitable contributions 4,000
A. What is the Clays' taxes payable or (refund due) (ignore the alternative minimum tax)?
B. What is the Clays' tentative minimum tax and alternative minimum tax?
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