Georgette is single, age 66, with 2 dependent children under the age of 12, and
ID: 2532195 • Letter: G
Question
Georgette is single, age 66, with 2 dependent children under the age of 12, and 2 dependents over age 18 and in college.
Her income is as follows:
Wages from employment $85,000 with taxes withheld of $6,400
Interest from Regions bank $100
Interest from city of Jackson Municipal Bonds $800
Insurance Life Insurance proceeds from dead brother $100,000
Gambling Winnings $4,500
Capital loss on sale of IBM stock $6,000
?
?
He also incurred the following:
?
$27,000
15,500
7,500
4,500
8,600
6,500
?
Directions: Compute the following showing the details. Use the text editor to show computations where applicable to receive credit.
What is her most favorable filing status?
What is her AGI?
What is her Taxable Income?
What is her marginal tax rate?
What is the tax?
What is the amount of the refund or taxes due?
?
?
?
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Medical expenses (before 10%-of-AGI floor)$27,000
Interest on home mortgage15,500
State income tax7,500
State sales tax4,500
Real estate tax8,600
Charitable contribution6,500
Gambling losses 8,000 Uninsured tornado damage to property 25,000Explanation / Answer
What is her most favorable filing status?
Ans: Single
What is her AGI?
Ans: Caculation of AGI Taxabe Non-Taxable
1.Wages from employment $85,000
taxes withheld of $6,400
Interest from Regions bank $100
Interest from city of Jackson Municipal Bonds $800
Insurance Life Insurance proceeds from dead brother $100,000
Gambling Winnings $4,500
Capital loss on sale of IBM stock - $6,000
Adjusted Gross Income 83,600
What is her Taxable Income?
Ans.: I Adjusted Gross Income Deductible Non-deductible
$ 83,600
itemized Deductions:
Medical Expenses 20,730 6,270 (7.5% of AGI)
Taxes paid:
State Income Tax 7,500
State Sales Tax 4,500
Real Estate Tax 8,600 16,100
Interest paid on home mortgage 15,500
Charitable Conributions paid 6,500
Gambing Loss 8,000
Uninsured tornado damage to property 25,000
Total Itemised deuctions 91830
Personal Exemption @4,050 X 5 family members 20250
Taxable income is Less than deductions and exemptions So, Taxable Income 0
What is her marginal tax rate?
Ans: As the taxable income is nill, tax thereon is Nil, so marginal tax rate is also Nil
What is the tax?
Ans.: Nil
What is the amount of the refund or taxes due?
Ans: Tax due is Nil Tax Refund will be $6400 which has been withheld from wages from Employmnt.
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