Ralph and Josee have adjusted gross income of $53,000. They have itemized deductions of $18,000 and incurred $2,000 in college expenses for their daughter who is a freshman at a local community college

They file jointly and have three exemptions at $4,000 each. Compute their tax liability for the current year.
A) $227
B) $1,170
C) $255
D) $2,780


Answer: A
Explanation: A)
AGI $53,000
Less itemized deductions $18,000
Less exemptions (3) $11,400
Taxable income $23,600
Exhibit 4.6, Panel B - $1,740 + 15%($23,600 - $17,400) = $2,670 - $2,000 (college expense credit) = $670

Business

You might also like to view...

XM Consulting collects information on various industrial products. When faced with buying decisions, businesses can visit XM's website to purchase detailed information on the various options available to them

XM Consulting can be called a(n) ________. A) infomediary B) market maker C) customer community D) third party arbitrator E) informant

Business

When using a cost-based approach, once the cost of a good or service has been determined, additional factors need not be considered in establishing a selling price

Indicate whether the statement is true or false

Business

An important insight of international trade theory is that when countries exchange goods and services one with the other it

A. is typically beneficial only to the low wage trade partner country. B. is typically harmful to the technology lagging country. C. is always beneficial to both countries. D. is usually beneficial to both countries. E. tends to create unemployment in both countries.

Business

Which of the following is NOT true for a limited partnership?

A) Limited partners may sell their interest in the company. B) It has limited liability for its owners. C) One general partner must exist who has unlimited liability. D) Only the name of general partners can appear in the name of the firm.

Business