John and Sandy Ferguson got married eight years ago and have a seven-year-old daughter, Samantha. In 2021, John worked as a computer technician at a local university earning a salary of $152,000, and Sandy worked part time as a receptionist for a law firm earning a salary of $29,000. John also does some Web design work on the side and reported revenues of $4,000 and associated expenses of $750. The Fergusons received $800 in qualified dividends and a $200 refund of their state income taxes. The Fergusons always itemize their deductions, and their itemized deductions were well over the standard deduction amount last year. Assume the Fergusons did not receive an advance payment for the 2021 individual recovery credit because they are not eligible for the credit. Use Exhibit 8-10 Links to an external site., Tax Rate Schedule Links to an external site., Dividends and Capital Gains Tax Rates Links to an external site., 2021 AMT exemption Links to an external site.for reference.

EXHIBIT 8-10 Child and Dependent Care Credit Percentage

If AGI is over	But not over	Then the percentage is
$ 0	$125,000	50%
125,000	127,000	49
127,000	129,000	48
129,000	131,000	47
181,000	183,000	21
183,000	400,000	20
400,000	402,000	19
402,000	404,000	18
434,000	436,000	2
436,000	438,000	1
438,000		0

Source: Source: Internal Revenue Code. " 21. Expenses For Household And Dependent Care Services Necessary For Gainful Employment.

The Fergusons reported making the following payments during the year:

State income taxes of $4,400. Federal tax withholding of $21,000.

Alimony payments to Johns former wife of $10,000 (divorced 12/31/2011).

Child support payments for Johns child with his former wife of $4,100.

$12,200 of real property taxes.

Sandy was reimbursed $600 for employee business expenses she incurred. She was required to provide documentation for her expenses to her employer.

$3,600 to Kid Care day care center for Samanthas care while John and Sandy worked.

$14,000 interest on their home mortgage ($400,000 acquisition debt).

$3,000 interest on a $40,000 home-equity loan. They used the loan to pay for a family vacation and new car.

$15,000 cash charitable contributions to qualified charities.

Donation of used furniture to Goodwill. The furniture had a fair market value of $400 and cost $2,000.

What is the AGI?

How will the following sources be referenced in the computation of Fergusons Federal Income Taxes?

EXHIBIT 8-10 Child and Dependent Care Credit Percentage

Tax Rate Schedule

Dividends and Capital Gains Tax Rates

202X AMT exemption