Gary and Wendy are married and file a joint tax return claiming their seven children, ages 7,9, 11, 13, 15, 17 and 19, as dependents. They pay Susan Smith $20,000 per year to care for their children after school and provide some house cleaning (you can ignore household employment taxes). Information for 2020 includes the following (cut & past table into Excel): AGI including earned and unearned income 490,000 Gary's earned income 415,000 Wendy's earned income 55,000 Federal income taxes (all paid in 2020) State and local income taxes (all paid in 2020) Real estate property taxes Home mortgage interest Charitable contributions 108,000 25,000 8,900 14,200 7,900 20,000 Pay Susan Smith for childcare (You can ignore any possible additional medicare tax and net investment income tax.) Starting with AGI, show each step of the tax formula and calculate taxable income, tax (before credits), child tax credit, child & dependent care credit, total tax credits, total tax (after credits), tax due (refund due). The rows could be labeled as follows: AGI Standard Deduction Itemized deductions Add ows here to calculate itemize deductions
Gary and Wendy are married and file a joint tax return claiming their seven children, ages 7,9, 11, 13, 15, 17 and 19, as dependents. They pay Susan Smith $20,000 per year to care for their children after school and provide some house cleaning (you can ignore household employment taxes). Information for 2020 includes the following (cut & past table into Excel): AGI including earned and unearned income 490,000 Gary's earned income 415,000 Wendy's earned income 55,000 Federal income taxes (all paid in 2020) State and local income taxes (all paid in 2020) Real estate property taxes Home mortgage interest Charitable contributions 108,000 25,000 8,900 14,200 7,900 20,000 Pay Susan Smith for childcare (You can ignore any possible additional medicare tax and net investment income tax.) Starting with AGI, show each step of the tax formula and calculate taxable income, tax (before credits), child tax credit, child & dependent care credit, total tax credits, total tax (after credits), tax due (refund due). The rows could be labeled as follows: AGI Standard Deduction Itemized deductions Add ows here to calculate itemize deductions
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Transcribed Image Text:Gary and Wendy are married and file a joint tax return claiming their seven children, ages 7,9, 11, 13, 15, 17
and 19, as dependents. They pay Susan Smith $20,000 per year to care for their children after school and
provide some house cleaning (you can ignore household employment taxes). Information for 2020 includes the
following (cut & past table into Excel):
ZOOM
AGI including earned and unearned income
490,000
Gary's earned income 415,000
Wendy's earned income 55,000
Federal income taxes (all paid in 2020)
State and local income taxes (all paid in 2020)
Real estate property taxes
Home mortgage interest
Charitable contributions
108,000
25,000
8,900
14,200
7,900
Pay Susan Smith for childcare
20,000
(You can ignore any possible additional medicare tax and net investment income tax.)
Starting with AGI, show each step of the tax formula and calculate taxable income, tax (before credits), child
tax credit, child & dependent care credit, total tax credits, total tax (after credits), tax due (refund due). The
rows could be labeled as follows:
AGI
Standard Deduction
Itemized deductions
Add rows here to calculate itemize deductions
Transcribed Image Text:Taxable Income
Tax on Taxable Income (before credits)
Add data here for calculating taxes
Child tax credit
Add rows here to calculate child tax credit
Child & dependent care credit
Add rows her to calculate child & dependent care credit
Total Tax Credits
Total tax after credíts
Prepayments
Tax due (refund due)
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