Andrew and Mandy are married and they file a joint tax return. They have salaries of $50,000 each. They have twin children, a boy (Andrew, Jr.) and a girl (Laverne). The twins are 7 years old and do not attend daycare.
What is Andrew and Mandy's taxable income?
Andrew and mandy are married and file a joint tax return
While calculating the taxable income , the standard deductions are reduced from the adjusted gross income to make it taxable income.
when a joint tax return is filed the standard deduction allowed is doubled i.e it is for both the individuals.
standard deduction is $12200 per person when joint return filed it becomes $24400.
Further the parents can claim child tax credit for its childrens upto $2000 per child as they are dependent and below the age of 17.
Further child and dependent care expenses are also be taken as credit but in this case as no information is given.
Now the tax credits are not reduced from the taxable income but it is reduced from the taxes which are liable to be paid.
Thus the Taxable Income = $50000 + $50000 - $24400 = $75600.
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