Question

I'm having trouble with the John and Sandy Fergusons' question for 2018 where John makes $152000, Sandy makes $29000, web design work is $4000 with associated expenses of $750. They received $800 in qualified dividends and $200 refund of their state income taxes. They itemize their deductions. State income tax $4400, withholding of $21000. Alimony payments to John's former wife $10000 (divorced in 2014). Child support payments for John's child $4100. $12200 of real property taxes. Sandy was remimbursed $600 for employee business expenses she incurred. $3600 to Kid Care day care center for Samantha's care while John & Sandy worked. $14000 interest on their home mortgage ($400000 acquisition debt). $3000 interest on a $40000 home equity loan used to pay for a family vacation and new car. $15000 cash charitable contributions to qualified charities. Donation of used furniture to Goodwill. The furniture had a FMV $400 and cost $2000. What is the Fergusons' 2018 federal income taxes payable or refund, including any self-employement tax and AMT, if applicable. Complete pages 1 & 2 of Form 1040 and Form 6251 for John and Sandy. The form for the AMT is stumping me.

Answer 1

- John and Sandy Ferguson's 1040 Form.

John and Sandy Ferguson's need to pay $8770 as Federal Income Tax. (See the workings below for your reference).

Salaries - 52000 +29000+4000 =$85,000

(Schedule A expenses)

Taxes You Paid

State Tax paid -4400

Real Estate tax paid -3200

Interest You Paid

14000 - Interest paid on home Morgage are exempt

Gift to Charity

Cash Charitable contribution to qualified US charities -$6000

charities to goodwill -400

Total Schedule A expense -$28,000 -refer point no.40

child related credits -4100 paid for john''s first child.

$3600paid for samantha's day care since both John and his wife are working.

money spent on Education and Research for improving employee's skills is exempted from tax. amounting to $1680 (sl.no.12).

Interest of $3000 on loans for family vacation not tax deductible and hence not considere