Answer:
A) $76500
B) $72500
C) $24750
D) tax refund of $260
Explanation:
A) Determine the gross income for Marc and Michelle
Marc has a salary of $64000
Michelle earns $12000
from bonds, they gain an interest of $500
Consequently, total gross income = 64000 + 12000 + 500 = $76500
B) Now, calculate the adjusted gross income for Marc and Michelle
Gross income totals $76500
Moving expenses allowable = $2500
Alimony paid to ex-spouse = $1500
Adjusted gross income = 76500 - 2500 - 1500 = $72500
C) Compute the total deductions from AGI for Marc and Michelle
Standard deduction = $12600
itemized deductions = $6000
Personal and dependency allowances = $12150
To derive the Deductions from AGI, one needs to sum the personal and dependency allowance with the standard deduction (selecting the greater value between standard and itemized deductions).
= 12600 + 12150 = $24750
D) Now find Marc and Michelle's taxable income
Adjusted gross income is $72500
Deductions based on itemized amount = $24750
Thus, taxable income = 72500 - 24750 = $47750
E) Finally, ascertain if Marc and Michelle are due a tax refund or owe taxes for the year
Tax rate notes:
for income between $18451 to $79000: tax rate is $1845 plus 15% on income exceeding $18450
Taxable income is $47750
Tax obligation = 1845 + (47750 - 18450) * 15% = $6240
Child tax credit totals $1000
Taxes withheld amounts to $5500
Tax refund is calculated as tax obligation minus child tax credit minus withheld taxes
6240 - 1000 - 5500 = $260
thus, a tax return amounting to $260 will be issued
