Hello,

Please help,

Maxwell is a fifth-grade school teacher who earned a salary of $38,000 in 2020. She is 45 years old and has been divorced for four years. She receives $1,200 of alimony payments each month from her former husband (divorced in 2016). Maxwell also rents out a small apartment building. This year Maxwell received $50,000 of rental payments from tenants and she incurred $19,500 of expenses associated with the rental. Maxwell and her son Michael (20 years old at the end of the year) moved to Georgia in January of this year. Maxwell provides more than one-half of Michaels support. They had been living in Colorado for the past 15 years, but ever since her divorce, Maxwell has been wanting to move back to Georgia to be closer to her family. Luckily, last December, a teaching position opened up and Maxwell and Michael decided to make the move. Maxwell paid a moving company $2,010 to move their personal belongings, and she and Michael spent two days driving the 1,426 miles to Georgia. Maxwell rented a home in Georgia. Heather decided to continue living at home with her mom, but she started attending school full-time in January and throughout the rest of the year at a nearby university. She was awarded a $3,000 partial tuition scholarship this year, and Maxwell helped out by paying the remaining $500 tuition cost. If possible, Maxwell thought it would be best to claim the education credit for these expenses. Maxwell wasn't sure if she would have enough items to help her benefit from itemizing on her tax return. However, she kept track of several expenses this year that she thought might qualify if she was able to itemize. Maxwell paid $5,800 in state income taxes and $12,500 in charitable contributions during the year. She also paid the following medical-related expenses for herself and Michael:

Insurance premiums	$	7,952
Medical care expenses	$	1,100
Prescription medicine	$	350
Nonprescription medicine	$	100
New contact lenses for Heather	$	200

Shortly after the move, Maxwell got distracted while driving and she ran into a street sign. The accident caused $900 in damage to the car and gave her a whiplash. Because the repairs were less than her insurance deductible, she paid the entire cost of the repairs. Maxwell wasnt able to work for two months after the accident. Fortunately, she received $2,000 from her disability insurance. Her employer, the Central Georgia School District, paid 60 percent of the premiums on the policy as a nontaxable fringe benefit and Maxwell paid the remaining 40 percent portion. A few years ago, Maxwell acquired several investments with her portion of the divorce settlement. This year she reported the following income from her investments: $2,200 of interest income from corporate bonds and $1,500 interest income from City of Denver municipal bonds. Overall, Maxwells stock portfolio appreciated by $12,000, but she did not sell any of her stocks. Michael reported $6,200 of interest income from corporate bonds he received as gifts from his father over the last several years. This was Michaels only source of income for the year. Maxwell had $10,000 of federal income taxes withheld by her employer. Michael made $1,000 of estimated tax payments during the year. Maxwell did not make any estimated payments. Maxwell had qualifying insurance for purposes of the Affordable Care Act (ACA).

a. Determine Maxwells federal income taxes due or taxes payable for the current year.

2020 Tax Rate Schedules

Individuals

Schedule X-Single

If taxable income is over:	But not over:	The tax is:
$ 0	$ 9,875	10% of taxable income
$ 9,875	$ 40,125	$987.50 plus 12% of the excess over $9,875
$ 40,125	$ 85,525	$4,617.50 plus 22% of the excess over $40,125
$ 85,525	$163,300	$14,605.50 plus 24% of the excess over $85,525
$163,300	$207,350	$33,271.50 plus 32% of the excess over $163,300
$207,350	$518,400	$47,367.50 plus 35% of the excess over $207,350
$518,400		$156,235 plus 37% of the excess over $518,400

Schedule Y-1-Married Filing Jointly or Qualifying Widow(er)

If taxable income is over:	But not over:	The tax is:
$ 0	$ 19,750	10% of taxable income
$ 19,750	$ 80,250	$1,975 plus 12% of the excess over $19,750
$ 80,250	$171,050	$9,235 plus 22% of the excess over $80,250
$171,050	$326,600	$29,211 plus 24% of the excess over $171,050
$326,600	$414,700	$66,543 plus 32% of the excess over $326,600
$414,700	$622,050	$94,735 plus 35% of the excess over $414,700
$622,050		$167,307.50 plus 37% of the excess over $622,050

Schedule Z-Head of Household

If taxable income is over:	But not over:	The tax is:
$ 0	$ 14,100	10% of taxable income
$ 14,100	$ 53,700	$1,410 plus 12% of the excess over $14,100
$ 53,700	$ 85,500	$6,162 plus 22% of the excess over $53,700
$ 85,500	$163,300	$13,158 plus 24% of the excess over $85,500
$163,300	$207,350	$31,830 plus 32% of the excess over $163,300
$207,350	$518,400	$45,926 plus 35% of the excess over $207,350
$518,400		$154,793.50 plus 37% of the excess over $518,400

Schedule Y-2-Married Filing Separately

If taxable income is over:	But not over:	The tax is:
$ 0	$ 9,875	10% of taxable income
$ 9,875	$ 40,125	$987.50 plus 12% of the excess over $9,875
$ 40,125	$ 85,525	$4,617.50 plus 22% of the excess over $40,125
$ 85,525	$163,300	$14,605.50 plus 24% of the excess over $85,525
$163,300	$207,350	$33,271.50 plus 32% of the excess over $163,300
$207,350	$311,025	$47,367.50 plus 35% of the excess over $207,350
$311,025		$83,653.75 plus 37% of the excess over $311,025