Mr. and Mrs. S have the following income items: Mr. S’s self-employment tax was

Question

Mr. and Mrs. S have the following income items:

Mr. S’s self-employment tax was $12,903. The couple had $13,050 itemized deductions. They provide 100 percent of the financial support of Mr. S’s 82-year-old mother, who resides in their home. Compute the couple’s income tax on a joint return. Assume the taxable year is 2017. Use Individual Tax Rate Schedules and Standard Deduction Table. (Round your intermediate calculations and final answers to the nearest whole dollar amount.)

Mr. S’s Schedule C net profit $ 91,320 Mrs. S’s Schedule C net loss (7,480 ) Mrs. S’s taxable pension 12,300

Explanation / Answer

Joint Tax return Mr. S’s Schedule C net profit                          91,320 Less: 50% deduction of self employment tax (12903/2)                            6,452 Net adjusted income      84,869 Mrs. S’s Schedule C net loss      (7,480) Mrs. S’s taxable pension      12,300 Gross income 89,689 itemised deduction 13,050 12,903 Net income 63,736 Tax 10%(0-18650)     1,865 15%(18650-75900)     6,763 Total tax     8,628

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