1. In 2020, Adam, your brother in law, has the following items below. Adam is not sure how much tax refund that he will receive so he asks you, an accounting student to help him with estimating his tax refund. Use the tax calculation spreadsheet to help Adam figure out his refund for 2020.
   1. Salary: $70k
   2. Income from his Airbnb rental: $10k
   3. Tax withheld in 2020 (Prepayment): $15,400
   4. Adam has a total itemized deduction of $200 (from his Goodwills donation)

Adam is married and has 1 child who is qualify for a $2000 child tax credit. Adams wife (your sister) is a stay at home mom and do not have any source of income in 2020

For this question, you need to use the Tax calculation worksheet and look up the needed tax rate and deduction info. Below is my suggestion on steps to handle this tax problem.

Step 1: Decide Adams filing status.

Step 2: Base on the filing status, look up the info regarding Tax rate and Standard deduction on the Tax info 2020 tab

Step 3: Fill that info from step 2 into the correct row in the IC tax basis formula tab

Step 4: Fill the rest of the info Adam give you into the IC tax basis formula tab.

tax info 2020:

tax basis formula:

2020 Fed Income Tax Bracket (Source: Nerd Wallet) Tax rate Single Married, filing jointly Married, filing separately 10% $0 to $9,875 $0 to $19,750 $0 to $9,875 12% $9,876 to $40,125 $19,751 to $80,250 $9,876 to $40,125 22% $40,126 to $85,525 $80,251 to $171,050 $40,126 to $85,525 24% $85,526 to $163,300 $171,051 to $326,600 $85,526 to $163,300 32% $163,301 to $207,350 $326,601 to $414,700 $163,301 to $207,350 35% $207,351 to $518,400 $414,701 to $622,050 $207,351 to $311,025 37% $518,401 or more $622,051 or more $311,026 or more Head of household $0 to $14,100 $14,101 to $53,700 $53,701 to $85,500 $85,501 to $163,300 $163,301 to $207,350 $207,351 to $518,400 $518,401 or more 2020 Standard Deduction Filing Status Deduction Amount Single Married Filing Jointly Head of Household 30000 50000 80000 20000 * $12,400 $24,800 $18,650 2020 Child Tax Credit $2000/child IC Tax basic formula Tax info 2020 Sheet3 + 2020 Tax Rates on Long Term Capital Gains For Married Individuals Filing For Unmarried Individuals For Heads of Households Joint Returns Tax Rate Taxable Income Over 0% $0 $0 $0 15% $40,000 $80,000 $53,600 20% $441,450 $496,600 $469,050 Additional Net Investment Income Tax 3.80% MAGI above $200,000 MAGI above $250,000 MAGI above $200,000 B D E 50,000 Gross Income $ (-) Adjustments (Above the Line deductions) Adjusted Gross Income (AGI) $ (-) From AGI deduction: $ Greater of (a) Standard deduction OR $ (b) Itemized deduction $ Deduction for Qual. Business Income $ (x) Taxable income $ Tax rate (-) Income tax liability $ (-) Credit Prepayments Tax due or (Tax refund) $ 50,000 12,700 12,500 500 200 37,300 0.12 4,476 6,000 (1,524) IC Tax basic formula Tax info 2020 Sheet3 +