Marc and Michelle are married and earned salaries this year of $74,000 and $15,750, respectively. In addition to their salaries, they received interest of $350 from municipal bonds and $1,750 from corporate bonds. Marc contributed $3,750 to an individual retirement account, and Marc paid alimony to a prior spouse in the amount of $2,750. Marc and Michelle have a 10-year-old son, Matthew, who lived with them throughout the entire year. Thus, Marc and Michelle are allowed to claim a $2,000 child tax credit for Matthew. Marc and Michelle paid $8,500 of expenditures that qualify as itemized deductions and they had a total of $7,400 in federal income taxes withheld from their paychecks during the course of the year. (Use the tax rate schedules) a. What is Marc and Michelle's gross income? Answer is complete and correct. Description Amount Marc's salary Michelle's salary Corporate bond interest S 74,000 15,750 1,750 Gross income 91,500 b. What is Marc and Michelle's adjusted gross income? Answer is complete and correct. 85,000 djusted gross come c. What is the total amount of Marc and Michelle's deductions from AGI? Total deductions from AGI d. What is Marc and Michelle's taxable income? Taxable income e. What is Marc and Michelle's taxes payable or refund due for the year? Refund due Taxes payable Schedule Y-1-Married Filing Jointly or Qualifying Widow(er) If taxable income is over: But not over: The tax is: S 19,050 S 77.400 S165.000 S315,000 $400,000 S600,000 $ 19,050 $ 77,400 $165,000 $315,000 $400,000 $600,000 110% of taxable income | $1,905 plus 12% of the excess over $19,050 |$8907 plus 22% of the excess over $77,400 |S28, 179 plus 24% of the excess over $165,000 | S64, 179 plus 32% of the excess over $315,000 | S91379 plus 35% ofthe excess over S400.000 S 161,379 plus 37% ofthe excess over S600.000 Marc and Michelle are married and earned salaries this year of $74,000 and $15,750, respectively. In addition to their salaries, they received interest of $350 from municipal bonds and $1,750 from corporate bonds. Marc contributed $3,750 to an individual retirement account, and Marc paid alimony to a prior spouse in the amount of $2,750. Marc and Michelle have a 10-year-old son, Matthew, who lived with them throughout the entire year. Thus, Marc and Michelle are allowed to claim a $2,000 child tax credit for Matthew. Marc and Michelle paid $8,500 of expenditures that qualify as itemized deductions and they had a total of $7,400 in federal income taxes withheld from their paychecks during the course of the year. (Use the tax rate schedules) a. What is Marc and Michelle's gross income? Answer is complete and correct. Description Amount Marc's salary Michelle's salary Corporate bond interest S 74,000 15,750 1,750 Gross income 91,500 b. What is Marc and Michelle's adjusted gross income? Answer is complete and correct. 85,000 djusted gross come c. What is the total amount of Marc and Michelle's deductions from AGI? Total deductions from AGI d. What is Marc and Michelle's taxable income? Taxable income e. What is Marc and Michelle's taxes payable or refund due for the year? Refund due Taxes payable Schedule Y-1-Married Filing Jointly or Qualifying Widow(er) If taxable income is over: But not over: The tax is: S 19,050 S 77.400 S165.000 S315,000 $400,000 S600,000 $ 19,050 $ 77,400 $165,000 $315,000 $400,000 $600,000 110% of taxable income | $1,905 plus 12% of the excess over $19,050 |$8907 plus 22% of the excess over $77,400 |S28, 179 plus 24% of the excess over $165,000 | S64, 179 plus 32% of the excess over $315,000 | S91379 plus 35% ofthe excess over S400.000 S 161,379 plus 37% ofthe excess over S600.000
