Chapter 4, Problem 8DC1

Summary Introduction

Case summary:

Mr. & Mrs. N are preparing to file their 2014 income taxes. H’s mother, M, has moved in with them, so H is no longer working. M is dependent on their income for support except for her $536 monthly Social Security benefit. H is taking this opportunity to work toward her master’s degree.

Character in this case:

Z, H and M.

Adequate information:

Medical expenses are $3,600.

Rusty’s braces expense are $1,500.

Real estate taxes are $900.

State taxes withheld and hold is $4,000

Mortgage interest expense is $7,200.

Charitable contribution is $3,400.

Unreimbursed business expenses are $2,300.

Qualified adoption expenses are $6,700.

To explain:

Whether Z should have his employer adjusts his federal tax withholding amount.