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Jack (age 30) and Victoria (age 29) are married and have three children ages 6,

ID: 2482341 • Letter: J

Question

Jack (age 30) and Victoria (age 29) are married and have three children ages 6, 9, and 14. Their salaries for the year amounted to $87,659 and they received $4,150 of taxable interest income. Jack and Victoria’s deductions for adjusted gross income amounted to $2,250, and their itemized deductions were $11,257. Jack and Victoria file a joint income tax return for 2015.

Calculate the following amounts:

Adjusted gross income

Itemized deduction or standard deduction amount

Number of exemptions and amount of exemptions

Taxable income

Income tax liability

Explanation / Answer

Income

Adjusted Gross Income

Tax

Credits

Other Taxes

Refundable Tax Credits

Total Tax Due and Tax Payments

Jack & Victoria Income Tax filing for 2015 Filing status Married filing jointly Personal exemption yes Spouse exemption yes Dependents 0 Total number of exemptions claimed 2

Income

Wages, salaries, tips, etc $87,659 Taxable interest $4,150 Total income $91,809

Adjusted Gross Income

Adjustments from AGI $2,250 Total adjustments $2,250 Adjusted gross income (AGI) $89,559

Tax

Itemized deduction $11,257 Standard deduction $12,600 Deduction to use (higher of Standard deduction and Itemized deduction) $12,600 Deduction for exemptions $8,000 Taxable income $68,959 Tax $9,421 Alternative Minimum Tax (AMT) $0 Excess advance premium tax credit repayment (form 8962) $0 Total tax $9,421

Credits

Foreign tax credit (form 1116) $0 Child tax credit $3,000 Based on 3 qualifying dependents. Total credits that are non-refundable $3,000 Total tax after credits $6,421

Other Taxes

Total tax before refundable credits $6,421

Refundable Tax Credits

Total refundable credits $0

Total Tax Due and Tax Payments

Total tax $6,421 Adjusted Gross Income $89,559 Itemized/Std Deduction $12,600 No of exemptions 2 Amt of exemptions $8,000 Taxable Income $68,959 Income Tax Liability $6,421