Question
Marc and Mikkel are married and file a joint tax return. Marc and Mikkel earned salaries this year of $64,000 and $12,000, respectively. In addition
Marc and Mikkel are married and file a joint tax return. Marc and Mikkel earned salaries this year of $64,000 and $12,000, respectively. In addition to their salaries, they received interest of $350 from municipal bonds and $500 from corporate bonds. Marc contributed $2,500 to a traditional individual retirement account, and Marc paid alimony to a prior spouse in the amount of $1,500 (under a divorce decree effective June 1, 2006). Marc and Mikkel have a 10-year-old adopted son, Mason, who lived with them throughout the entire year. Thus, Marc and Mikkel are allowed to claim a $2,000 child tax credit for Mason. Marc and Mikkel paid $6,000 of expenditures that qualify as itemized deductions, and they had a total of $2,500 in federal income taxes withheld from their paychecks during the year. (Use the tax rate schedules.)
- What is the total amount of Marc and Mikkel's deductions from AGI?
- What is Marc and Mikkel's taxable income?
- What is Marc and Mikkel's taxes payable or refund due for the year?
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