Calculator eBook Video Problem 3-36 (LO. 1, 2, 3, 4, 5, 6) Charlotte (age 40) is

Question

Calculator eBook Video Problem 3-36 (LO. 1, 2, 3, 4, 5, 6) Charlotte (age 40) is a surviving spouse and provides all of the support of her four minor children, who live with her. Charlotte also maintains the household in which her parents live, and she furnished 60% of their support. Besides interest on city of Miami bonds in the amount of $5,500, Charlotte's father received $2,400 from a part-time job. Charlotte earns an $80,000 salary, a short-term capital loss of $2,000, and a cash prize of $4,000 at a church raffle. Charlotte reports itemizdd deductions of $10,500. Click here to access the standard deduction table to use, if required. a. Compute Charlotte's taxable income. for 2018 b. Using the Tax Rate Schedules (click here), tax liability for Charlotte is c. Compute Charlotte's child and dependent tax credit. Previous Next

Explanation / Answer

Part A Taxable income

Salary....... 80000

- short term capital loss.....(2000)

+ cash prize.......... 4000

AGI............. 82000

- personal exemption (7*4050).......(28350)

- standard deduction.............. (24000)

Taxable income.......$29650

Part B

Tax liability = 1905 + (29650-19050)*12% = 1905+1272 = $3177

Part C

Child and dependent tax credit = 4*2000 = $8000

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