Question

20. EARNED INCOME CREDIT: For Each of the following situations, compute the taxpayer's 2019 earned income...

20. EARNED INCOME CREDIT: For Each of the following situations, compute the taxpayer's 2019 earned income credit.

a. Patty and Ron Barnett file a joint return, claiming their two sons, ages 3 and 5, as dependents. The Barnetts' AGI is $14,400, which consists entirely of Ron's wages.

b. Joseph is a 25-year-old graduate.His gross income consists of $5,000 of wages and $80 in interest from a savings account. Joseph files as single and claims no dependents.

c. Suzanne and Vernon Zimmerman files a joint return, claiming her 6-year-old daughter as a dependent. The Zimmerman's AGI consist of Vernon's $26,375 in wages and $400.00 in dividend income.

d. Sarah files head of household, claiming her 2-year-old son as a dependent. Sarah's AGI consists of $18,000 in wages and $3,620 in interest income.

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Answer #1

Answer :

(a). Earned income credit = $5828

Explanation :

Barnett's AGI = $14400

Most extreme earned income credit with two qualifying younsters is $5828. Earned income credit in the event of married filling mutually with two qualifying kids starts with $19,030

(b). Earned income credit = $529

Explanation :

Joseph AGI = $5080 ($5000 + $80)

Most extreme earned income credit with no qualifying youngsters is $529. Earned income credit in the event of single with no qualifying kids starts with $8650

(c). Earned income credit = $3214

Expalnation :

Zimmerman's AGI = $26775 ($26375 + $400)

Most extreme earned income credit with one qualifying youngsters is $3526. Earned income credit in the event of married filling mutually wiht one qualifying kids starts with $24820 and closes with $41094

Calculation of earned income credit :

Earned income credit

= $3526 - (($26775 - $24820)*15.98%)

= $3,526 - (($1,955)*15.98/100

= $3,526 - $312.409

= $3,213.591

 $3,214 (Approx)

(d). Earned income credit = 0

Expalnation :

Investment income as far as interest income is over the constraint of $3600 in 2019 and in this way not qualified for earned income credit . Thefore, earned income credit is $0.

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