USE 2021 TAX RATES

Demarco and Janine Jackson have been married for 20 years and have four children (no children under age 6 at year- end) who qualify as their dependents (Damarcus, Jasmine, Michael, and Candice). The couple received salary income of $101,400 and qualified business Income of $10,000 from an Investment in a partnership, and they sold their home this year. They Initially purchased the home three years ago for $228,000 and they sold it for $320,000. The gain on the sale qualified for the exclusion from the sale of a principal residence. The Jacksons incurred $17,900 of itemized deductions (no charitable contributions), and they had $1,000 withheld from their paychecks for federal taxes. They are also allowed to claim a child tax credit for each of thelr children. However, because Candice was 18 years of age at year end, the Jacksons may claim a child tax credit for other qualifying dependents for Candice. (Use the tax rate schedules.) a. What is the Jacksons' taxable income, and what is their tax liability or (refund)? (Do not round Intermediate calculations.) Answer is complete but not entirely correct. Amount $ 111,400 0 S 111,400 Description (1) Gross income (2) For AGI deductions (3) Adjusted gross income (4) Standard deduction (5) Itemized deductions (6) Greater of standard deduction or itemized deductions (7) Deduction for qualified business income (8) Total deductions from AGI (9) Taxable income (10) Income tax liability (11) Other taxes (12) Total tax 25,100 17.900 25,100 2.000 27.100 84,300 10.043 S 0 S 10.043 (13) Credits 6.500 X (14) Prepayments 1,000 2.543 X Tax due with tax return xls