The Johnsons Calculate Their Income Taxes Several years have gone by since Harry and Belinda graduated from college and started their working careers. They both earn good salaries. They believe that they are paying too much in federal income taxes. The Johnsons' total income last year included Harry's salary of $73,000 and Belinda's salary of $94,000. She contributed $3,000 to her 401(k) for retirement. They earned $400 in interest on savings and checking and $3,000 interest income from the trust that is taxed in the same way as interest income from checking and savings accounts. Harry contributed $3,000 into a traditional IRA. (a) What is the Johnsons' reportable gross income on their joint tax return? (b) What is their adjusted gross income? (c) How much is the standard deduction for the Johnsons? (d) The Johnsons are buying a home that has monthly mortgage payments of $3,000, or $36,000 a year. Of this amount, $32,800 goes for interest and real estate property taxes. The couple has a $14,000 in other itemized deductions. Using these numbers and Table 4-2, calculate their taxable income and tax liability. (e) Assuming they had a combined $24,000 in federal income taxes withheld, how will be their refund or tax due? (f) What is their marginal tax rate? (9) List three additional ways that the Johnsons might reduce their tax liability next year. The Johnsons Calculate Their Income Taxes Several years have gone by since Harry and Belinda graduated from college and started their working careers. They both earn good salaries. They believe that they are paying too much in federal income taxes. The Johnsons' total income last year included Harry's salary of $73,000 and Belinda's salary of $94,000. She contributed $3,000 to her 401(k) for retirement. They earned $400 in interest on savings and checking and $3,000 interest income from the trust that is taxed in the same way as interest income from checking and savings accounts. Harry contributed $3,000 into a traditional IRA. (a) What is the Johnsons' reportable gross income on their joint tax return? (b) What is their adjusted gross income? (c) How much is the standard deduction for the Johnsons? (d) The Johnsons are buying a home that has monthly mortgage payments of $3,000, or $36,000 a year. Of this amount, $32,800 goes for interest and real estate property taxes. The couple has a $14,000 in other itemized deductions. Using these numbers and Table 4-2, calculate their taxable income and tax liability. (e) Assuming they had a combined $24,000 in federal income taxes withheld, how will be their refund or tax due? (f) What is their marginal tax rate? (9) List three additional ways that the Johnsons might reduce their tax liability next year
