Gisele and Tom Bundchen are married and have three daughters. During the year, G

Question

Gisele and Tom Bundchen are married and have three daughters. During the year, Gisele earned a salary of $97,0oo, and Tom's investments earned interest of $2,250. In addition, Gisele's investments have appreciated from a cost of $20,000 to a year-end value of $24,000. During the current year, Tom received a gift of $20,000 from his parents. The following data has been compiled to aid in the preparation of their joint income tax return: Salary income (from W-2) Interest income Itemized deductions Personal exemptions Contribution to Roth I.R.A. Federal income taxes withheld $97,000 2,250 14,000 5,000 8,000 Compute the amount of: a) taxable income, b) income taxes, and c) amount of tax to be paid (refunded)

Explanation / Answer

Salary income 97000 Interest income 2250 Total income 99250 Less: Contribution to Roth IRA 5000 AGI 94250 less: itemised deductions 14000 Exemptions (5*4050) 20250 Taxable income 60000 Taxes 8067.5 Less: Taxes withheld 8000 Tax payable 67.5 Income taxes Tax rate Slab Tax amount 10% 0-18650 1865 15% 18650-75900( calculate till 60000) 6202.5 Total taxes payable 8067.5

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