Mary (age 42 is a California resident & provides 100% of the support for her dau

ID: 2414123 • Letter: M

Question

Mary (age 42 is a California resident & provides 100% of the support for her daughter Amy (age 3). In 2016, Mary had the following transactions:

Salary income from DML, LLP $250,000

Alimony income from EX husband 14,000

Child support payments from EX husband 14,000

Unemployment compensation from State of California 7,000

Paid California income taxes (5,000)

Paid childcare expense (3,500)

Question 1. what is Mary's adjusted gross income for the year?

2. what is Mary's taxable income for the year?

3. what is Mary's net tax liability for the year? (ignore AMT)

4. how would 2018 tax law changes impact her taxable income?

Answer to 1):

Mary's adjusted gross income for the year will be as follows

Salary income - $250000

Alimony income- $14000

Child support payment-$14000

Unemployment compensation from state - $7000

Total -$ 285000

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