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vesna_86
9 days ago
5

Julie paid a day care center to watch her two-year-old son while she worked as a computer programmer for a local start-up compan

y.
What amount of child and dependent care credit can Julie claim in each of the following alternative scenarios?


a. Julie paid $2,000 to the day care center and her AGI is $50,000 (all salary).


b. Julie paid $5,000 to the day care center and her AGI is $50,000 (all salary).


c. Julie paid $4,000 to the day care center and her AGI is $25,000 (all salary).


d. Julie paid $2,000 to the day care center and her AGI is $14,000 (all salary).


e.
Julie paid $4,000 to the day care center and her AGI is $14,000 ($2,000 salary and $12,000 unearned income).
Business
1 answer:
Free_Kalibri [3.4K]9 days ago
7 0
Julie is eligible for the following amounts in child and dependent care credits based on different scenarios referred to below: - In the first case, she spent $2,000 on dependent care, and her qualified expenses amount to $3,000, with an earned income of $50,000. Thus, the eligible expenses for the credit are capped at $2,000 (the lowest of a, b, and c), granting her a credit rate of 20% (since AGI exceeds $43,000), totaling $400. - In the second scenario, Julie spent $5,000, where the qualifying expenses remain $3,000, resulting in a credit of $400 calculated similarly as before. - In the third case, spending $4,000 with an income of $25,000 results in a credit of $900 (as the rate is 30% with a qualifying expense of $3,000). - The fourth case of $2,000 spent and an income of $14,000 leads to a credit of $700 (as the percentage is 35%). - Lastly, a $4,000 expenditure under an income comprising $2,000 salary and $12,000 unearned results in a credit of $700 as well.
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