Demarco and Janine Jackson have been married for 20 years and have four children

Question

Demarco and Janine Jackson have been married for 20 years and have four children who qualify as their dependents (Damarcus, Janine, Michael, and Candice). The couple received salary income of $100,000, and they sold their home this year. They initially purchased the home three years ago for $200,000 and they sold it for $250,000. The gain on the sale qualified for the exclusion from the sale of a principal residence. The Jacksons incurred $16,500 of itemized deductions, and they had $6,250 withheld from their paychecks for federal taxes. They are also allowed to claim a child tax credit for each of their children. (use the tax rate schedules.) Demarco and Janine Jackson have been married for 20 years and have four children who qualify as their dependents (Damarcus, Janine, Michael, and Candice). The couple received salary income of $100,000, and they sold their home this year. They initially purchased the home three years ago for $200,000 and they sold it for $250,000. The gain on the sale qualified for the exclusion from the sale of a principal residence. The Jacksons incurred $16,500 of itemized deductions, and they had $6,250 withheld from their paychecks for federal taxes. They are also allowed to claim a child tax credit for each of their children. (use the tax rate schedules.) (1) Gross Income (2) For AGI deductions (3) Adjusted Gross Income (4) Standard deduction (5) Itemized deductions (6) Greater or Lessor of standard deductions or itemized deductions (7) Personal and dependency exemptions (8) Total deductions from AGI (9) Taxable Income (10) Income Tax Liability (11) Other Taxes (12) Total Tax (13) Credits (14) Prepayments Tax Liability (or Refund)

Explanation / Answer

Answer:-

Description

Amount

Computation

$100,000

Salary Income, gain home sale of $50,000 is excluded

0

$100,000

1-2

$11,900

Married filing jointly

$16,500

$16,500

Greater of 4 or 5

$22,800

6 exemption *3,800 exemption amount

$39,300

6+7

$60,700

3-8

$8,235

(60,700-17,400)*15%+1,740( see the tax rate schedule for married filing jointly)

0

$8,235

10-11

($4,000)

Child credits for four children (4*$1,000)

($6,250)

Tax (refund) with return

($2,015)

12+13+14

Description

Amount

Computation

1. Gross income

$100,000

Salary Income, gain home sale of $50,000 is excluded

1. For AGI deductions

0

1. Adjusted Gross Income

$100,000

1-2

1. Standard deduction

$11,900

Married filing jointly

1. Itemized deductions

$16,500

1. Greater or Lessor of standard deductions or itemized deductions

$16,500

Greater of 4 or 5

1. Personal and dependency exemptions

$22,800

6 exemption *3,800 exemption amount

1. Total deductions from AGI

$39,300

6+7

1. Taxable Income

$60,700

3-8

1. Income Tax Liability

$8,235

(60,700-17,400)*15%+1,740( see the tax rate schedule for married filing jointly)

1. Other Taxes

0

1. Total Tax

$8,235

10-11

1. Credits

($4,000)

Child credits for four children (4*$1,000)

1. Prepayments

($6,250)

Tax (refund) with return

($2,015)

12+13+14

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