13. Taxpayers get a choice to use their standard or itemized deduction, whichever one is higher. Tito and Tessa should ignore their $17,000 itemized deduction amount and use the standard deduction, which is higher for their filing status, instead: 1. Total Income = $95,000. 2. Adjustments to income = $15,000. 3. Adjusted Gross Income = $95,000 - $15,000 = $80,000. 4. Itemised deductions total $17,000; standard deduction is $25,900. Use the higher of the two. We are on to step 5. How much is Tito’s and Tessa’s taxable income?

13. Taxpayers get a choice to use their standard or itemized deduction, whichever one is higher. Tito and Tessa should ignore their $17,000 itemized deduction amount and use the standard deduction, which is higher for their filing status, instead: 1. Total Income = $95,000. 2. Adjustments to income = $15,000. 3. Adjusted Gross Income = $95,000 - $15,000 = $80,000. 4. Itemised deductions total $17,000; standard deduction is $25,900. Use the higher of the two. We are on to step 5. How much is Tito’s and Tessa’s taxable income?

Personal Finance

13th Edition

ISBN:9781337669214

Author:GARMAN

Publisher:GARMAN

Chapter4: Managing Income Taxes

Section: Chapter Questions

Problem 1DTM

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1. How much is the net taxable income using itemized deductions? 2. How much is the OSD (assuming taxpayer opted to use OSD)? 3. How much is the net taxable income using OSD?
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1. Determining a Refund or Taxes Owed. Based on the following data, will Ann Wilton receive a federal tax refund or owe additional taxes in 2019? LO2 Net income, $48,190 Deductions to determine net income, $11,420 Federal income tax withheld, $6,784 Total non-refundable tax credit amounts, excluding medical expenses, $12,069 Medical expenses, $2,300
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