Question

Charlotte (age 40) is a surviving spouse and provides all of the support of her four minor children, who live with her. Charlotte also maintains the household in which her parents live, and she furnished 60% of their support. Besides interest on City of Miami bonds in the amount of $5,500, Charlotte's father received $2,400 from a part-time job. Charlotte earns an $80,000 salary, a short-term capital loss of $2,000, and a cash prize of $4,000 at a church raffle. Charlotte reports itemized deductions of $10,500.

Click here to access the standard deduction table to use, if required.

a. Compute Charlotte's taxable income.
$

b. Using the Tax Rate Schedules (click here), tax liability for Charlotte is $-- for 2019.

c. Compute Charlotte's child and dependent tax credit.
$

Answer 1

A)

Particulars	Amount ($)
Charlotte salary	80000
Add: Cash prize	4000 (84000)
Less: short term loss	2000
Adjusted Gross Income	82000
Less: Standard Deductios	24000
Charlotte Taxable Income	58000

B)

Particulars	Amount ($)	working
First 19400 for married jointly	1940	(19400×10%)
Add: 19401- 78950 for married jointly	4632	(58000-19400) × 12%
Charlotte Tax liability for 2019	6572

C)

Particulars	Amount ($)	Working
Child tax credit	8000	(2000 × 4 minor child)
Dependent Tax credit	1000	500 × 2 ( parents)