Required information The following information applies to the questions displaye

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Required information The following information applies to the questions displayed below Marc and Michelle are married and earned salaries this year of $72,400 and $15,150, respectively. In addition to their salaries, they received interest of $350 from municipal bonds and $1,550 from corporate bonds. Marc contributed $3,550 to an individual retirement account, and Marc paid alimony to a prior spouse in the amount of $2,550. Marc and Michelle have a 10-year-old son, Matthew, who lived with them throughout the entire year. Thus, Marc and Michelle are allowed to claim a $2,000 child tax credit for Matthew. Marc and Michelle paid $8,100 of expenditures that qualify as itemized deductions and they had a total of $6,940 in federal income taxes withheld from their paychecks during the course of the year. (Use the tax rate schedules) a. What is Marc and Michelle's gross income? Description Amount Gross income

Explanation / Answer

a Marc Salary $72,400 Michelle Salary $15,150 Interest from corporate bonds $1,550 Gross Income $89,100 Interest from municipal bonds Non taxable b Description Engagement 1 Engagement 2 Gross Income before new work engagement $70,000 $70,000 Income from enagegment $8,820 $7,250 Additional for AGI deduction $3,900 Adjusted Gross Income $74,920 $77,250 As per 2018 Greater of itemized deductions or standard deductions $12,000 $12,000 Deduction for QBI $1,450 Taxable Income $62,920 $63,800

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