Question
Dwight, 66, and Angela, 45, reported the following information for 2020: Dwight and Angela are married and have 4 children. Dwight Jr. is 26 and
Dwight, 66, and Angela, 45, reported the following information for 2020:
Dwight and Angela are married and have 4 children. Dwight Jr. is 26 and lives with his parents who provide most of his support. His gross income for the year was $2,000. Their other children are 7, 9, and 11 years old.
Dwight worked for Dunder Mifflin. His salary was $180,000 and from that he chose to place $3,000 in a dependent care FSA and $2,000 in a medical FSA. Dunder Mifflin paid $15,000 in health insurance benefits for Dwight.
Dwight was injured on the job and received $15,000 in workers' compensation benefits.
Angela is a 60% limited partner in Sprinkles, Inc, partnership. Sprinkles had an ordinary income of $500,000 and a dividend income of $20,000. Additionally, Angela received distributions from the partnership of $55,000 over the year.
Angela won an award of $3,000 for the volunteer work she does with the local humane society. She gave the money away to a good friend with financial trouble.
Dwight likes to gamble. His gambling winnings for the year totaled $4,900. His gambling losses were $1,200.
Dwight and Angela had for AGI deductions totaling $7,000 and total itemized deductions of $25,000.
Calculate their 2020 gross income, AGI, taxable income (label all three), and eligible child and dependent tax credit.
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