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https://books.google.com/books?id=bDl-BAAAQBAJ&pg=PT96&lpg=PT96&dq=Art+and+cathy+brown+are+married+and+have+one+child&source=bl&ots=L1ZBDJiRrk&sig=orfjAC7GU31BLIP2j8k8fs348MY&hl=en&sa=X&ved=0CB0Q6AEwAGoVChMIhYHRi9utyAIViFweCh0KRwFV#v=onepage&q=Art%20and%20cathy%20brown%20are%20married%20and%20have%20one%20child&f=false
Explain and calculate the differences resulting from a $1,000 tax credit versus a $1,000 tax deduction for a single taxpayer in the 25 percent tax bracket with $40,000 of pre-tax income. 103 5. Ralph and Diane Hearst have been notified that they are being audited. What should they do to prepare for the a LO4 6. udit? Art and Cathy Brown are married and have one child. Art is putting together some figures so that he can prepare the Brown's joint 2013 tax return. He can claim three personal exemptions (including himself). So far, he's been able to determine the following with regard to income and possible deductions: L02, 3 7, $1,155 50,770 5,000 5,200 1,450 200 875 380 Total unreimbursed medica l expenses incurred Gross wages and commissions earned RA contribution Mortgage interest paid Capital gains realized on assets held less than 12 months Income from limited partnership Job expenses and other allowable deductions Interest paid on credit cards Dividend and interest income earned Sales taxes paid Charitable contributions made Capital losses realized Interest paid on a car loan Alimony paid by Art to his first wife Social Security taxes paid Property taxes paid State income taxes paid 2,470 1,200 3,475 570 6,000 2,750 700 1,700 Given this information, how much taxable income will the Browns have in 2013? (Note: Assume that Art is covered by a pension plan where he works, the standard deduction of $12,200 for married filing jointly applies, and each exemption claimed is worth $3,900.)Explanation / Answer
I dont know the answer of the 7th part but i can help you with 5th and 6th
5) Tax deduction is the deduction from income whereas tax credit is the deduction from tax liability
With the tax deduction of 1000 the income will be reduced by 1000 and the effect on tax liability will be reduction of 25 if the assessee falls in the bracket of 25% whereas tax credit of 1000 will reduce the tax liability with the actual amount of 1000
6) They should get their accounts audited with the chartered accountant and submit the audit report while filing the return of income
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