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How do I calculate tax liability?? Please help Problem 1-5 (Algorithmic) The Tax Formula for Individuals, Filing Status and Tax Computation, The Standard Deduction (LO
How do I calculate tax liability?? Please help
Problem 1-5 (Algorithmic) The Tax Formula for Individuals, Filing Status and Tax Computation, The Standard Deduction (LO 1.3, 1.5, 1.8) Diego, age 28, married Dolores, age 27, in 2020. Their salaries for the year amounted to $94,000 and they had interest income of $3,700. Diego and Dolores' deductions for adjusted gross income amounted to $8,240; their itemized deductions were $19,800, and they have no dependents. Table for the standard deduction Filing Status Standard Deduction Single $12,400 Married, filing jointly 24,800 Married, filing separately 12,400 Head of household 18,650 Qualifying widow(er) 24,800 Click here to access the tax tables. a. What is the amount of their adjusted gross income? 89,460 Feedback Check My Work Individual taxpayers calculate their tax in accordance with a tax formula. Understanding the formula is important, since all tax determinations are based on the result. An important step in calculating the amount of a taxpayer's tax is the determination of the taxpayer's correct filing status. The tax law has five different filing statuses: single; married filing jointly; married filing separately; head of household; and qualifying widow(er). Itemized deductions are personal expense items that Congress has allowed as tax deductions. The standard deduction was placed in the tax law to provide relief for b. In order to minimize taxable income, Diego and Dolores will take the standard deduction in the amount of $ 24,800 Feedback Check My Work Correct c. What is the amount of their taxable income? 64,660 Feedback Check My Work Correct d. What is their tax liability for 2020? $ 85,300 X Feedback Check My Work IncorrectStep by Step Solution
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