Sandy and John Ferguson got married eight years ago and have a seven-year-old daughter, Samantha. In 2022, Sandy worked as a computer technician at a local university earning a salary of $152,600, and John worked part time as a receptionist for a law firm earning a salary of $29,600
Sandy and John Ferguson got married eight years ago and have a seven-year-old daughter, Samantha. In 2022, Sandy worked as a computer technician at a local university earning a salary of $152,600, and John worked part time as a receptionist for a law firm earning a salary of $29,600. Sandy also does some Web design work on the side and reported revenues of $4,600 and associated expenses of $1,050. The Fergusons received $920 in qualified dividends and a $230 refund of their state income taxes. The Fergusons always itemize their deductions, get the full benefit of deducting the entire amount of state income taxes paid, and their itemized deductions were well over the standard deduction amount last year. Use Exhibit 8-10, Tax Rate Schedule, Dividends and
The Fergusons reported making the following payments during the year:
- State income taxes of $4,550. Federal tax withholding of $21,000.
- Alimony payments to Sandy's former spouse of $10,300 (divorced 12/31/2014).
- Child support payments for Sandy's child with her former spouse of $4,160.
- $12,260 of real property taxes.
- John was reimbursed $630 for employee business expenses he incurred. He was required to provide documentation for her expenses to her employer.
- $3,600 to Kid Care day care center for Samantha's care while Sandy and John worked.
- $14,600 interest on their home mortgage ($400,000 acquisition debt).
- $3,090 interest on a $41,200 home-equity loan. They used the loan to pay for a family vacation and new car.
- $15,300 cash charitable contributions to qualified charities.
- Donation of used furniture to
Goodwill . The furniture had a fair market value of $460 and cost $2,300.
a. What is the Fergusons' 2022 federal income taxes payable or refund, including any self-employment tax and AMT, if applicable?
EXHIBIT 8-10 Child and Dependent Care Credit Percentage
| If AGI is over | But not over | Then the percentage is |
|---|---|---|
| $ 0 | $15,000 | 35% |
| 15,000 | 17,000 | 34 |
| 17,000 | 19,000 | 33 |
| 19,000 | 21,000 | 32 |
| 21,000 | 23,000 | 31 |
| 23,000 | 25,000 | 30 |
| 25,000 | 27,000 | 29 |
| 27,000 | 29,000 | 28 |
| 29,000 | 31,000 | 27 |
| 31,000 | 33,000 | 26 |
| 33,000 | 35,000 | 25 |
| 35,000 | 37,000 | 24 |
| 37,000 | 39,000 | 23 |
| 39,000 | 41,000 | 22 |
| 41,000 | 43,000 | 21 |
| 43,000 | No limit | 20 |
Tax Rates for Net Capital Gains and Qualified Dividends
| Rate* | Taxable Income | ||||
|---|---|---|---|---|---|
| Married Filing Jointly | Married Filing Separately | Single | Head of Household | Trusts and Estates | |
| 0% | $0 - $83,350 | $0 - $41,675 | $0 - $41,675 | $0 - $55,800 | $0 - $2,800 |
| 15% | $83,351 - $517,200 | $41,676 - $258,600 | $41,676 - $459,750 | $55,801 - $488,500 | $2,801 - $13,700 |
| 20% | $517,201+ | $258,601+ | $459,751+ | $488,501+ | $13,701+ |
EXHIBIT 8-5 2022 AMT Exemptions
| Filing Status | Exemption | Phase-Out Begins at This Level of AMTI | Phase-Out Complete for This Level of AMTI |
|---|---|---|---|
| Married filing jointly | $118,100 | $1,079,800 | $1,552,200 |
| Married filing separately | 59,050 | 539,900 | 776,100 |
| Head of household and single | 75,900 | 539,900 | 843,500 |
2022 Tax Rate Schedules
IndividualsSchedule X-Single
| If taxable income is over: | But not over: | The tax is: |
|---|---|---|
| $ 0 | $ 10,275 | 10% of taxable income |
| $ 10,275 | $ 41,775 | $1,027.50 plus 12% of the excess over $10,275 |
| $ 41,775 | $ 89,075 | $4,807.50 plus 22% of the excess over $41,775 |
| $ 89,075 | $ 170,050 | $15,213.50 plus 24% of the excess over $89,075 |
| $ 170,050 | $ 215,950 | $34,647.50 plus 32% of the excess over $170,050 |
| $ 215,950 | $ 539,900 | $49,335.50 plus 35% of the excess over $215,950 |
| $ 539,900 | — | $162,718 plus 37% of the excess over $539,900 |
Schedule Y-1-Married Filing Jointly or Qualifying Widow(er)
| If taxable income is over: | But not over: | The tax is: |
|---|---|---|
| $ 0 | $ 20,550 | 10% of taxable income |
| $ 20,550 | $ 83,550 | $2,055 plus 12% of the excess over $20,550 |
| $ 83,550 | $ 178,150 | $9,615 plus 22% of the excess over $83,550 |
| $ 178,150 | $ 340,100 | $30,427 plus 24% of the excess over $178,150 |
| $ 340,100 | $ 431,900 | $69,295 plus 32% of the excess over $340,100 |
| $ 431,900 | $ 647,850 | $98,671 plus 35% of the excess over $431,900 |
| $ 647,850 | — | $174,253.50 plus 37% of the excess over $647,850 |
Schedule Z-Head of Household
| If taxable income is over: | But not over: | The tax is: |
|---|---|---|
| $ 0 | $ 14,650 | 10% of taxable income |
| $ 14,650 | $ 55,900 | $1,465 plus 12% of the excess over $14,650 |
| $ 55,900 | $ 89,050 | $6,415 plus 22% of the excess over $55,900 |
| $ 89,050 | $ 170,050 | $13,708 plus 24% of the excess over $89,050 |
| $ 170,050 | $ 215,950 | $33,148 plus 32% of the excess over $170,050 |
| $ 215,950 | $ 539,900 | $47,836 plus 35% of the excess over $215,950 |
| $ 539,900 | — | $161,218.50 plus 37% of the excess over $539,900 |
Schedule Y-2-Married Filing Separately
| If taxable income is over: | But not over: | The tax is: |
|---|---|---|
| $ 0 | $ 10,275 | 10% of taxable income |
| $ 10,275 | $ 41,775 | $1,027.50 plus 12% of the excess over $10,275 |
| $ 41,775 | $ 89,075 | $4,807.50 plus 22% of the excess over $41,775 |
| $ 89,075 | $ 170,050 | $15,213.50 plus 24% of the excess over $89,075 |
| $ 170,050 | $ 215,950 | $34,647.50 plus 32% of the excess over $170,050 |
| $ 215,950 | $ 323,925 | $49,335.50 plus 35% of the excess over $215,950 |
| $ 323,925 | — | $87,126.75 plus 37% of the excess over $323,925 |
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