Question
Martin S. Albert (Social Security number 111-11-1111) is 39 years old and is married to Michele R. Albert (Social Security number 123-45-6789). The Alberts live
Martin S. Albert (Social Security number 111-11-1111) is 39 years old and is married to Michele R. Albert (Social Security number 123-45-6789). The Alberts live at 512 Ferry Road, Newport News, VA 23601. They file a joint return and have two dependent children, Charlene, age 17, and Jordan, age 18. Charlenes Social Security number is 123-45-6788, and Jordans Social Security number is 123-45-6787. In 2021, Martin and Michele had the following transactions:
-
Michele received $120,000 in salary from Red Steel Corporation, where she is a construction engineer. Withholding for Federal income tax was $10,750. The amounts withheld for FICA taxes were as follows: $7,049 ($113,700 6.2%) for Social Security and $1,740 ($120,000 1.45%) for Medicare. Michele worked in Mexico from January 1, 2020, until February 15, 2020. Her $120,000 salary for 2020 includes $18,000 she earned for January and one-half of February 2020 while working in Mexico.
-
Martin and Michele received $400 interest on Montgomery County (Virginia) school bonds.
-
Martin received $2,300 interest from a Bahamian bank account.
-
Michele received 50 shares of Applegate Corporation common stock as a stock dividend. The shares had a fair market value of $2,500 at the time Michele received them, and she did not have the option of receiving cash.
-
Martin and Michele received a $1,200 refund on their 2019 Virginia income taxes. Their itemized deductions in 2019 totaled $34,000 and included state taxes of $7,400.
-
Michele paid $6,600 alimony to her former husband, Benjamin P. Morgan (Social Security number 123-45-6786). The divorce was finalized in March 2016.
-
Martin and Michele kept the receipts for their sales taxes paid of $1,100.
-
Martin and Micheles itemized deductions were as follows:
-
State income tax paid and withheld totaled $5,100.
-
Real estate taxes on their principal residence were $3,700.
-
Mortgage interest on their principal residence was $2,500.
-
Part 1Tax Computation
Compute the Alberts net tax payable (or refund due) for 2020.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started