Alan and Amanda Ross lived with their 2 children (ages 5 and 9). They provided o

Question

Alan and Amanda Ross lived with their 2 children (ages 5 and 9). They provided over one-half of the support for each child. Alan is also entitled to claim is son from a prior relationship even though the boy lives with his mother. Alan also pays $9,600 in alimony to his ex-wife. The Ross' intend to file jointly for 2017. Neither is blind, and both are under age 65. They reported the following tax-related information for the year:

Salary income Alan $135,000 Salary income Amanda $45,000 Lottery winnings 5,000 Real estate taxes 3,200 State income taxes withheld in 2017 1,800 Personal Property taxes 2,650 Medical expenses (no health insurance) 18,000 Federal income tax withholding 9,500 Qualified home mortgage interest 8,500 Qualified home equity loan interest 2,500 Charitable contributions 4,000 Employee Business Expenses 2,650 Tax preparation fees 560

Answer the following: Gross Income FOR AGI Deductions AGI FROM AGI Deductions Taxable Income Credits & Withholding Tax due or Refund Tentative Minimum Tax AMT Due

Explanation / Answer

GROSS INCOME FOR AGI

add both salarys and lotary income which comes to $ 185000

DEDUCTIONS FROM AGI

Except with holding taxes and medical insurance all other items provided have to be considered.which amounts to $24060.

Medical expenses should not be deducted because : as per the rule excess of 10% of AGI can only be deducted . so in this case 10% of AGI is $18500 and medical expenses is $18000 hence no deduction.

allimony of $9600 is allowed as deduction.

3 children support by them. so maxlowed

hence total deduction amounts to $24060+9600+14040=$47700.

TAXABLE INCOME

AGI- Deductions

$185000-$47700= $137300.

TAX RATE AND REFUND OR DUE

tax rate is 25%

amount of tax is 25802.5.

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