Problem 1-9 The Tax Formula for Individuals, Filing Status and Tax Computation, Define qualifying dependents,...
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Problem 1-9 The Tax Formula for Individuals, Filing Status and Tax Computation, Define qualifying dependents, The Standard Deduction (LO 1.3, 1.5, 1.7)
Jim, age 50, and Martha, age 49, are married with three dependent children. They file a joint return for 2019. Their income from salaries totals $49,500, and they received $10,125 in taxable interest, $5,000 in royalties, and $3,000 in other ordinary income. Jim and Martha's deductions for adjusted gross income amount to $3,200, and they have itemized deductions totaling $18,200.
Table for the standard deduction
Filing Status
Standard Deduction
Single
$ 12,200
Married, filing jointly
24,400
Married, filing separately
12,200
Head of household
18,350
Qualifying widow(er)
24,400
Click here to access the tax tables.
Calculate the following amounts:
a. Gross income
67,625
b. Adjusted gross income
64,425
c. Itemized deduction or standard deduction amount
24,400
d. Taxable income
40,425 (wrong)
e. Income tax liability (before any credits)
4,470 (wrong)
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