The Tax Formula for Individuals, Filing Status and Tax Computation, Define qualifying dependents, The Standard Deduction (LO 1.3, 1.5, 1.7)
Jim, age 50, and Martha, age 49, are married with three dependent children. They file a joint return for 2019. Their income from salaries totals $49,500, and they received $10,125 in taxable interest, $5,000 in royalties, and $3,000 in other ordinary income. Jim and Martha's deductions for adjusted gross income amount to $3,200, and they have itemized deductions totaling $18,200.
Table for the standard deduction
Filing Status Standard Deduction
Single $ 12,200 Married, filing jointly 24,400 Married, filing separately 12,200 Head of household 18,350 Qualifying widow(er) 24,400 Click here to access the tax tables.
Calculate the following amounts:
a. Gross income $fill in the blank 1
67,625
b. Adjusted gross income $fill in the blank 2
64,425
c. Itemized deduction or standard deduction amount $fill in the blank 3
24,400
d. Taxable income $fill in the blank 4
40,025
e. Income tax liability (before any credits)