Julie paid a day care center to watch her two-year-old son while she worked as a computer programmer for a local start- up company. What amount of child and dependent care credit can Julie claim in 2021 in each of the following alternative scenarios? Use Exhibit 8-10 e. Julie paid $5,300 to the day care center and her AGI is $14,000 ($3,300 salary and $10,700 unearned income). Child and dependent care credit **Exhibit 8-10: Child and Dependent Care Credit Percentage**This table outlines the percentage of the Child and Dependent Care Credit based on Adjusted Gross Income (AGI). The AGI ranges and corresponding credit percentages are listed as follows:| If AGI is over | But not over | Then the percentage is ||----------------|--------------|------------------------|| $0 | $125,000 | 50% || $125,000 | $127,000 | 49% || $127,000 | $129,000 | 48% || $129,000 | $131,000 | 47% || $181,000 | $183,000 | 21% || $183,000 | $400,000 | 20% || $400,000 | $402,000 | 19% || $402,000 | $404,000 | 18% || $434,000 | $436,000 | 2% || $436,000 | $438,000 | 1% || $438,000 | | 0% |**Source:** Internal Revenue Code. "§ 21. Expenses For Household And Dependent Care Services Necessary For Gainful Employment."This table is essential for understanding how tax credits for dependent care decrease as income increases. It aims to illustrate how families with different income brackets can benefit from supporting childcare or dependent care services, which are necessary for gainful employment. ### Child and Dependent Care Credit Calculation**Scenario:**Julie paid $5,300 to the day care center, and her Adjusted Gross Income (AGI) is $14,000. This income is composed of a $3,300 salary and $10,700 in unearned income.**Calculation:**To determine the child and dependent care credit Julie is eligible for, you would typically follow these steps:1. **Identify Eligible Expenses:** Julie's eligible expenses for the dependent care provider total $5,300. 2. **Determine AGI:** Her AGI is $14,000, which includes a $3,300 salary and $10,700 of unearned income.3. **Credit Calculation:** - The child and dependent care credit is calculated based on the eligible expenses and the AGIs. - Typically, a percentage of the eligible expenses is allowed as a credit, with the percentage decreasing as income increases. The diagram accompanying this description is a simple input field labeled "Child and dependent care credit," where you would input the calculated credit amount after completing the necessary tax form calculations.For the precise eligibility and credit percentage, refer to the IRS guidelines or use a tax preparation software.

The Child and Dependent Care Credit seem to be a nonrefundable tax credit available to taxpayers…

Julie paid a day care center to watch her two-year-old son while she worked as a computer programmer for a local start- up company. What amount of child and dependent care credit can Julie claim in 2021 in each of the following alternative scenarios? Use Exhibit 8-10 e. Julie paid $5,300 to the day care center and her AGI is $14,000 ($3,300 salary and $10,700 unearned income). Child and dependent care credit

Julie paid a day care center to watch her two-year-old son while she worked as a computer programmer for a local start- up company. What amount of child and dependent care credit can Julie claim in 2021 in each of the following alternative scenarios? Use Exhibit 8-10 e. Julie paid $5,300 to the day care center and her AGI is $14,000 ($3,300 salary and $10,700 unearned income). Child and dependent care credit

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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