Author Question: Jeff and Kathy O'Connor file a 1040 jointly. Jeff earned 39,000 and Kathy earned 13,700 working part ... (Read 171 times)

Collmarie · **on:** Jun 24, 2018

Jeff and Kathy O'Connor file a 1040 jointly. Jeff earned 39,000 and Kathy earned 13,700 working part time. The O'Connors have four children. Jeff contributed 3,500 to his IRA. They had 5,200 in medical and dental expenses. They paid 4,390 in real estate taxes, 7,260 in mortgage interest, and made 1,500 in charitable contributions. Together they had 1,825 withheld for income tax during the year. Using a tax table, how much additional tax do they owe or what is their refund?

Question 2

Pyuish and Vi Kashia file a 1040 jointly. Pyuish earned 37,570 and Vi earned 41,230. The Kashias have three children. Both Pyuish and Vi contributed 2,000 to their IRAs. They had 3,129 in medical and dental expenses. They paid 2,670 in real estate taxes, 1,220 in student loan interest, 4,890 in mortgage interest, and made 3,000 in charitable contributions. What is their taxable income?

mcarey591 · **Reply #1 on:** Jun 24, 2018

Answer to Question 1

The O'Connors will receive a 472 refund.
Total income: 52,700; subtract the IRA contribution; 52,700 - 3,500 = 49,200
Medical and dental: 5,200; 7.5 of adjusted gross income is 0.075 49,200 = 3,690;
5,200 - 3,690 = 1,510 is deductible.
Total deductions: 1,510 + 13,150 = 14,660;
Deduct for exemptions: 6 3,500 = 21,000;
Subtract deductions and exemptions from the adjusted gross income:
49,200 - 14,660 - 21,000 = 13,540.
Use the tax table to find tax: 1,353. Then find the difference between the amount paid, 1,825, and the amount owed: 1,825 - 1,353 = 472.

Answer to Question 2

45,520;
Total income: 78,800; subtract the IRA contributions; 78,800 - 4,000 = 74,800;
Medical and dental of 3,129 is less than 7.5 of adjusted gross income, so it is not deductible.
Total deductions: 11,780; Deduct for exemptions: 5 3,500 = 17,500
Subtract deductions and exemptions from the adjusted gross income:
74,800 - 11,780 - 17,500 = 45,520