Demarco and Janine Jackson have been married for 20 years and have four children (no children under age 6 at year- end) who qualify as their dependents (Damarcus, Jasmine, Michael, and Candice). The couple received salary income of $96,500 and qualified business income of $18,500 from an investment in a partnership, and they sold their home this year. They initially purchased the home three years ago for $242,500 and they sold it for $292,500. The gain on the sale qualified for the exclusion from the sale of a principal residence. The Jacksons incurred $18,200 of itemized deductions, and they had $4,000 withheld from their paychecks for federal taxes. They are also allowed to claim a child tax credit for each of their children. However, because Candice was 18 years of age at year end, the Jacksons may claim a child tax credit for other qualifying dependents for Candice. (Use the tax rate schedules.) a. What is the Jacksons' taxable income, and what is their tax liability or (refund)? Note: Do not round intermediate calculations. (1) Gross income (2) For AGI deductions (3) Adjusted gross income (4) Standard deduction (5) Hemized deductions (7) Deduction for qualified business income (8) Total deductions from AGI (9) Taxable income (10) Income tax liability Description (11) Other taxes (12) Total tax (13) Credits (14) Prepayments Amount $ 90,500 18,700
Demarco and Janine Jackson have been married for 20 years and have four children (no children under age 6 at year- end) who qualify as their dependents (Damarcus, Jasmine, Michael, and Candice). The couple received salary income of $96,500 and qualified business income of $18,500 from an investment in a partnership, and they sold their home this year. They initially purchased the home three years ago for $242,500 and they sold it for $292,500. The gain on the sale qualified for the exclusion from the sale of a principal residence. The Jacksons incurred $18,200 of itemized deductions, and they had $4,000 withheld from their paychecks for federal taxes. They are also allowed to claim a child tax credit for each of their children. However, because Candice was 18 years of age at year end, the Jacksons may claim a child tax credit for other qualifying dependents for Candice. (Use the tax rate schedules.) a. What is the Jacksons' taxable income, and what is their tax liability or (refund)? Note: Do not round intermediate calculations. (1) Gross income (2) For AGI deductions (3) Adjusted gross income (4) Standard deduction (5) Hemized deductions (7) Deduction for qualified business income (8) Total deductions from AGI (9) Taxable income (10) Income tax liability Description (11) Other taxes (12) Total tax (13) Credits (14) Prepayments Amount $ 90,500 18,700
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Demarco and Janine Jackson have been married for 20 years and have four children (no children under age 6 at year-
end) who qualify as their dependents (Damarcus, Jasmine, Michael, and Candice). The couple received salary income of
$96,500 and qualified business Income of $18,500 from an investment in a partnership, and they sold their home this
year. They initially purchased the home three years ago for $242,500 and they sold it for $292,500. The gain on the sale
qualified for the exclusion from the sale of a principal residence, The Jacksons incurred $18,200 of itemized deductions,
and they had $4,000 withheld from their paychecks for federal taxes. They are also allowed to claim a child tax credit for
each of their children. However, because Candice was 18 years of age at year end, the Jacksons may claim a child tax
credit for other qualifying dependents for Candice. (Use the tax rate schedules.)
a. What is the Jacksons' taxable income, and what is their tax liability or (refund)?
Note: Do not round intermediate calculations.
(1) Gross income
(2) For AGI deductions
(3) Adjusted gross income
(4) Standard deduction
(5) Itemized deductions
(7) Deduction for qualified business income
(8) Total deductions from AGI
(9) Taxable income
(10) Income tax liability
(11) Other taxes
Description
(12) Total tax
(13) Credits
(14) Prepayments
Amount
$
96,500
18,700
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