Part 1 Carl and Renee Simpson are 63 and 62 respectively. They file a joint return. They had income for 2020 as follows: Pension from former employer (Carl) 16,700 Pension from former employer (Renee) 25,950 Interest income from savings account 600 Interest income from City of Miami bonds 3,200 Dividends from Apple stock held for over one year 1,600 Annuity 4.725 Social Security (Carl) 18,672 Social Security (Renee) 21,000 Wages (Carl) 150,000 Wages (Renee) 202,000 The cost of the annuity was $52,000 and they expect to receive a total of 10 years of payments of $525 a month. They have received 9 payments through 2020, They had the following expenses as well: State income taxes 4,000 Income tax withheld 80,000 Property taxes on home 6.500 Mortgage interest (all is deductible) 22,000 Charitable contributions (cash) 6,800 Sales tax paid 1.000 They also provide over half of the total support of each of the following individuals, all of whom still live at home. Their only child, Jennifer, was killed in an automobile accident 10 years ago and they have adopted her children (their grandchildren). 1. Daniel, their son (grandson), age 22 a full-time student, who married on Oct. 1, has no income of his own and did not file a joint retum with his wife, Annie, who eamed S11,000 during 2020 2. Matthew, their son (grandson), age 16, graduated high school in May 2020. He is taking a leap year and will not begin college until 2021. He had total gross income of 6,300 in 2020 3. JoAnn, their oldest child (grandchild), age 27 is a full time and 3. JoAnn, their oldest child (grandchild), age 27, is a full-time graduate student with gross income of $4,250. Compute Carl and Renee's income tax payable (or refund due). Show all your work. Tax rates for 2020 Maximum for this bracket 10% 0-19,750 1975 12% 19,751-80,250 7260 22% 80,251-171,050 19976 24% 171,051-326,600 37332 32% 326,601-414,700 ? Dividend Tax Rate: 15% for income $80,001-496,600 Gross Income' AGI (20 points) Dividend Tax Rate: 15% for income $80,001-496,600 Gross Income AGI (20 points) Deductions from AGI (15 points) Taxable Income (5 points) Income Tax (5 points) Assume they are not responsible for any Alternative Minimum Tax and they have paid all the Social Security, Medicare, and state taxes required. Remember Dividends are not taxed at same rate as income. Income Tax (5 points) Assume they are not responsible for any Alternative Minimum Tax and they have paid all the Social Security, Medicare, and state taxes required. Remember Dividends are not taxed at same rate as income. : Tax Credits (Remember phase-outs for credits.): (5 points) Withholding: Refund or Tax Payable: (5 points)
