1. Demeter is a single taxpayer. Her AGI in 2014 is $81,200. Demeter may claim a
ID: 2457145 • Letter: 1
Question
1. Demeter is a single taxpayer. Her AGI in 2014 is $81,200. Demeter may claim a child tax credit for her daughter Persephone. What amount of child tax credit is Demeter entitled to claim after any applicable phase-out?
2. Jack paid $5,000 in daycare expenses for his five-year-old daughter so he could work. His AGI for the year was $37,500 (all earned income). What is the amount of his child and dependent care credit?
3. Julien and Sarah are married, file a joint return, and have two children, Kaya and Christopher. Kaya just finished her third year at college and Christopher just finished his first year of graduate school (fifth year of college). Tuition and books for the past year were $1,800 for Kaya and $5,000 for Christopher. How much can Julien and Sarah claim in educational credits if their joint AGI was $120,000 for 2014?
4. Baker earned $198,000 of salary as an employee in 2014. How much should his employer have withheld from his paycheck for FICA taxes (rounded to the nearest whole dollar amount)?
Explanation / Answer
1. Demeter is a single taxpayer. Her AGI in 2014 is $81,200. Demeter may claim a child tax credit for her daughter Persephone. What amount of child tax credit is Demeter entitled to claim after any applicable phase-out?
AGI $81,200
Child Tax credit available 20%
Amount of child tax credit is Demeter entitled to claim $16,240.
2. Jack paid $5,000 in daycare expenses for his five-year-old daughter so he could work. His AGI for the year was $37,500 (all earned income). What is the amount of his child and dependent care credit?
AGI $37,500
Child Tax credit available 23%
Jack Paid $5,000
Amount of child tax credit is $1,150.
3. Julien and Sarah are married, file a joint return, and have two children, Kaya and Christopher. Kaya just finished her third year at college and Christopher just finished his first year of graduate school (fifth year of college). Tuition and books for the past year were $1,800 for Kaya and $5,000 for Christopher. How much can Julien and Sarah claim in educational credits if their joint AGI was $120,000 for 2014?
As per the American Oppurtunity credit the tax credit is limited to
100% on First $2,000 and
25% on next $2,000. for each child
$1,800 for Kaya and
$2,500 for Christopher.
4. Baker earned $198,000 of salary as an employee in 2014. How much should his employer have withheld from his paycheck for FICA taxes (rounded to the nearest whole dollar amount)?
FICA tax is 6.2% with a wage limit of $118,500. Hence the amount to withheld is $7,347.
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