Question

Max and Jo are married, filing jointly, and earned wages of $96,400 in 2019. They also earned $822 in interest on investments and contributed $11,320 to a tax-deferred retirement plan. They claimed tax-deferred educator expenses of $185 and will use their 2019 standard deduction of $24,400 rather than itemizing their deductions. Finally, they claim $2,000 child tax credits for each of their two children. Calculate Max and Jo's gross income. Calculate Max and Jo's adjusted gross income. Calculate Max and Jo's taxable income.

Answer 1

Answer :

Particulars	Amount ($)
Annual Salary (a)	96400
Interest on investments (b)	822
Gross Income [a + b]	97222
Tax deferred eductor expenses (c)	(185)
Adjusted Gross Income [a + b - c]	97037
(-) Deductions : [(i) + (ii) + (iii)]	(39720)
(i). Contritubtions to tax deferred retirement plan - $11320	-
(Allowed upto $19000)	-
(ii). Standard Deduction - $24400	-
(iii). Child tax credits ($2000*2) - $4000	-
Total taxable income	57317