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Jeremy earned $101,400 in salary and $7,400 in interest income during the year. Jeremy’s employer withheld $11,200 of federal income taxes from Jeremy’s paychecks during the year. Jeremy has one qualifying dependent child who lives with him. Jeremy qualifies to file as head of household and has $29,200 in itemized deductions. (Use the tax rate schedules.)

a. Determine Jeremy’s tax refund or taxes due.

Description Amount (1) Gross income $108,800 (2) For AGI deductions 0 (3) Adjusted gross income $108,800 (4) Standard deduction 9,350 (5) Itemized deductions 29,200 (6) Greater of standard deduction or itemized deductions 29,200 (7) Taxable income $79,600 (8) Income tax liability $41,050 (9) Child tax credit (10) Tax withholding

Explanation / Answer

In 2017, the phase out threshold is $75,000 for head of household, For each $1,000 of income above the threshold, your available child tax credit is reduced by $50.

In absence of specific information it is assumed that tax laws of 2017 needs to be referred.

Hope this helps. Thanks

Description Amount (1) Gross income $108,800 (2) For AGI deductions 0 (3) Adjusted gross income $108,800 (4) Standard deduction 9,350 (5) Itemized deductions 29,200 (6) Greater of standard deduction or itemized deductions 29,200 (7) Taxable income $79,600 (8) Income tax liability $41,050 (9) Child tax credit $ 500 (10) Tax withholding $ 11200 Tax Due $ 29350

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