Question

R and J were married in 2007. They have a five year old child and a...

R and J were married in 2007. They have a five year old child and a son born December 16, 2018. R's 67 year old father lived in a nursing home until his death on March 4, 2018. R and J provided all of his support until his death. R earned $43,000 in salary during the year. They also had $2,100 in interest from the credit union. They incurred $7,800 in itemized deductions during the year. Compute their taxable income and their tax for 2018.

I am assuming they are filing Married Filing Jointly
R's Father died but can be claimed as additional dependent
Both children can be claimed as dependent children (even the newborn)

Homework Answers

Answer #1

Though R's father and both children can be claimed as qualifying dependents, there is no personal and dependency exemption in 2018.

So, their taxable income will be calculated as follows:

AGI 45100 ($43000 salary + $2100 interest from the credit union)
Less: greater of standard deduction or itemized deduction 24000 (standard deduction for married filing jointly in 2018)
Taxable income 21100
tax liability 2151 (1905+(12%*(21100-19050)) (using tax rates - 2018 for married filing jointly)

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