Calculate the amount of the child and dependent care creditallowed for 2008 in e
ID: 2433673 • Letter: C
Question
Calculate the amount of the child and dependent care creditallowed for 2008 in each of the following cases, assuming thetaxpayers had no income other than the stated amount.
a. William and Carla file a joint tax return, Carla earned$26,000 during the year, while William attended law schoolfull-time for 9 months and earned no income. They paid $3,500 forthe care of their 3-year-old child,Carl. $
b. Raymond and Michele file a joint tax return. Raymond earned$32,500 during the year, while Michele earned $9,000 for the yearfrom a part-time job. They paid $7,000 for the care of their twochildren under13. $
c. Beth is a single taxpayer who has two dependent childrenunder age 5. Beth earned $23,500 in wages during the year and paid$6,700 for the care of herchildren $
Explanation / Answer
a) Their child and dependent care credit would be $513. It islimited to their taxable income. Adjusted Gross Income(AGI) $26,000 Less: Standarddeduction -$10.900 Less: Personalexemption -$10,500 $3,500x 3 persons TaxableIncome $4,600 Tax on Income prior to Child Carededuction $460 Less: Child care limited to taxliability $460 ___________________________________________________________________________________________ Please check for applicable standard deduction and personalexemption from your book for year 2008.Related Questions
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