Explanation Given Information: The person T has the tax liability is $6,498, tax credits is $1,221 and other taxes is $885 and payments are $7,600. Formula used: The formulas used for the calculation are listed below: The total tax is calculated by the formula given below: Total tax = tax liability − tax credits + other taxes To check the amount is tax refund or tax owed. It is needed to see the difference between total payments and total tax. If the tax payments are greater than total taxes, the difference is tax refund and if the tax payments are less than total taxes, the difference is tax owed. Calculation: Taxable income is defined as the income to which tax rates are functional in order to discover the total amount of tax payable for the year. Tax credits are the amount of dollar subtracted from the tax liability. The followings steps are used to calculate Step 1: The total tax is calculated by the formula given below: So, Total tax = tax liability − tax credits + other tax

8th Edition

ISBN: 9781305888715

Author: Brechner

Publisher: CENGAGE LEARNING - CONSIGNMENT

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Chapter 18.III, Problem 24RE

To determine

To calculate: The amount of tax refund or tax owed of person T if the tax liability is $6,498, tax credits is $1,221 and other taxes is $885 and payments are $7,600.

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Chapter 18 Solutions

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The amount of tax refund or tax owed of person T if the tax liability is $6,498, tax credits is $1,221 and other taxes is $885 and payments are $7,600.

Solution Summary: The author calculates the amount of tax refund or tax owed of person T if the tax liability is 6,498, tax credits is 1,221 and other taxes is 885.

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To calculate: The amount of tax refund or tax owed of person T if the tax liability is $6,498, tax credits is $1,221 and other taxes is $885 and payments are $7,600.

Chapter 18 Solutions