**Case Study: Computing Tax Liabilities for Ali and Alex Arnaud**Ali and Alex Arnaud are a married couple with no dependent children. In 2022, Ali was employed at Smart Tech Corporation from January through March and at Computer Associates for the remainder of the year. Alex completed a degree in November and subsequently began working with Smith and Weber. The couple has reported the following financial information:- **Ali's Salary:** - From Smart Tech: $32,000 - From Computer Associates: $142,000- **Alex's Salary:** - From Smith and Weber: $15,550- **Additional Income:** - Interest from Savings Account: $700 - Dividends Eligible for 15% Rate: $2,200- **Deductions:** - Itemized Deductions: $9,000**Tasks:**a. **Compute the Adjusted Gross Income (AGI).** Combine all sources of income to calculate the AGI, which is essential for determining taxable income and potential tax credits.b. **Compute Taxable Income.** Deduct itemized deductions from the AGI to find the taxable income.c. **Compute Net Tax Liability (After Credits).** Use the taxable income to determine tax liability by applying the appropriate tax rate schedules and any tax credits.**Instructions:**- Complete the calculations using the information provided.- Use the Individual Tax Rate Schedules and Standard Deduction Table for your computations.- Enter results in the designated tabs for each requirement: - **Required A:** AGI - **Required B:** Taxable Income - **Required C:** Net Tax LiabilityBy following these steps, you can comprehensively understand the tax file preparation process for Ali and Alex Arnaud in 2022.

Aggregated gross income and taxable income are not the same. Aggregate gross income is the total income earned by a taxpayer in a financial year. Taxable income is the aggregated gross income reduced by deductions and credits. Aggregated gross income is calculated before taxable income.Given: Particulars Amount ($) Ali's salary from Smart Tech 32,000 Ali's salary from computer associates 142,000 Alex's salary from smith and weber 15,550 Interest from a savings account 700 Itemized deductions 9,000 Dividend eligible for 15% rate 2,200 a. Computation of AGI Particulars Amount ($) Ali's salary from Smart Tech 32,000 Ali's salary from computer associates 142,000 Alex's salary from smith and weber 15,550 Interest from a savings account 700 Dividend eligible for 15% rate 2,200 AGI 192,450 b. Computation of taxable income Particulars Amount ($) Ali's salary from Smart Tech 32,000 Ali's salary from computer associates 142,000 Alex's salary from smith and weber 15,550 Interest from a savings account 700 Itemized deductions (9,000) Standard deduction (12,950) Taxable income 168,300 c. Computation of net tax liability Only tax on dividends will be calculated because another tax rate is not given in the question Tax liability on dividend=$2,200××15%=$330 Therefore, the net tax liability on dividends is $330.

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Ali and Alex Arnaud are married with no dependent children. Ali worked for Smart Tech Corporation January through March and for Computer Associates the remainder of the year. Alex completed a degree in November and immediately began as an associate with Smith and Weber. They report the following information for 2022. Use Individual Tax Rate Schedules and Standard Deduction Table. Ali's salary from Smart Tech Ali's salary from Computer Associates Alex's salary from Smith and Weber Interest from savings account Itemized deductions Dividends eligible for 15% rate Required: a. Compute AGI. b. Compute taxable income. c. Compute net tax liability (after credits). Complete this question by entering your answers in the tabs below. Required A Required B Compute AGI. AGI Required C $ 32,000 142,000 15,550 700 9,000 2,200 < Required A Required B > 11

Ali and Alex Arnaud are married with no dependent children. Ali worked for Smart Tech Corporation January through March and for Computer Associates the remainder of the year. Alex completed a degree in November and immediately began as an associate with Smith and Weber. They report the following information for 2022. Use Individual Tax Rate Schedules and Standard Deduction Table. Ali's salary from Smart Tech Ali's salary from Computer Associates Alex's salary from Smith and Weber Interest from savings account Itemized deductions Dividends eligible for 15% rate Required: a. Compute AGI. b. Compute taxable income. c. Compute net tax liability (after credits). Complete this question by entering your answers in the tabs below. Required A Required B Compute AGI. AGI Required C $ 32,000 142,000 15,550 700 9,000 2,200 < Required A Required B > 11

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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