Comprehensive Example Ch 4 pt 2 - Online Class Salary $ 125,000.00 Corporate Bon

Question

Comprehensive Example Ch 4 pt 2 - Online Class Salary $ 125,000.00 Corporate Bonds $    10,000.00 Muni Bonds $      5,000.00 For AGI Deductions $      7,000.00 Itemized Deductions $      1,000.00 Filing Status MFJ Withholding $      5,000.00 Non-Refundable Credits $    10,000.00 Calculate: 2017 2018 Gross Income Adjusted Gross Income Taxable Income Income Tax Liability Tax Due/ (Refund) Comprehensive Example Ch 4 pt 2 - Online Class Salary $ 125,000.00 Corporate Bonds $    10,000.00 Muni Bonds $      5,000.00 For AGI Deductions $      7,000.00 Itemized Deductions $      1,000.00 Filing Status MFJ Withholding $      5,000.00 Non-Refundable Credits $    10,000.00 Calculate: 2017 2018 Gross Income Adjusted Gross Income Taxable Income Income Tax Liability Tax Due/ (Refund)

Explanation / Answer

YEAR 2018 Salary $                                                                               125,000.00 Corporate Bonds $                                                                                 10,000.00 Gross Income For AGI Deductions $                                                                                 (7,000.00) Adjusted gross income $                                                                               128,000.00 Higher of Below Standard Deduction $                                                                               (24,000.00) Standard Deduction 24,000.00 Itemized deductions 6,000.00 Taxable Income $                                                                               104,000.00 Tax liability $8907+(104,000-77400)*22% = $ 14,759 Credits $                                                                               (10,000.00) Withholding $                                                                                 (5,000.00) Refund $                                                                                     (241.00) YEAR 2017 Salary $                                                                               125,000.00 Corporate Bonds $                                                                                 10,000.00 Gross Income For AGI Deductions $                                                                                 (7,000.00) Higher of Below Adjusted gross income $                                                                               128,000.00 Standard Deduction 12,700.00 Standard Deduction $                                                                               (12,700.00) Itemized deductions 6,000.00 Exemption $                                                                                 (8,100.00) Taxable Income $                                                                               107,200.00 Tax liability $10452.5+(107,200-75900)*22% = $ 18277.50 Credits $                                                                               (10,000.00) Withholding $                                                                                 (5,000.00) Tax liability $                                                                                   3,277.50

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