Worksheet 4.1_Ch 4_FIN 333HYB Name:

• 1. Christine Melinsky and her husband Jared have four children, ages 4 to 10. Christine works as a marketing executive for a cosmetics firm, and Jared is a stay-at-home dad who is not employed outside of the home. Christines salary is $75,000. They have collected the following information to use in preparing their 2019 federal income tax return:
• The standard deduction for 2019 is $12,200 for singles and $24,400 for married filing jointly.
• Unreimbursed medical expenses, $2,500
• Mortgage interest, $15,300
• Property taxes, $3,600
• Federal income tax withheld $6,000
• State income tax withheld, $2,750
• Traditional IRA contribution, $6,000
• Gambling winnings, $600
• Student loan interest, $420 You should consult Table 4.1 for marginal tax rates.

Please answer the following questions. You can demonstrate your work in excel if you like. I have provided a case example. You can find that in Module 4.

1. Should they itemize deductions this year? Please show your work.
2. What is the Melinskys' taxable income for 2019, assuming that their filing status is married filing jointly? Please show details.
3. Use the tax rate schedule in Table 4.1 to calculate the tentative tax they owe (before any credits), assuming that their status is married filing jointly. Please show details.
4. Are the Melinskys eligible to take any tax credits? Explain.