Yulia and Mikhail had a joint taxable income of $58,700; and according to the tax tables, they owe $7,886 in federal taxes. Yulia is a full-time student earning her four-year degree at the local university. If their employers withheld $8,942 in federal taxes from their salaries and they qualify for a $2,000 education tax credit, calculate how much they owe or how much refund they can expect this year.

Question

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Their total tax liability is $7,886. With $8,942 withheld and a $2,000 education credit, they have overpaid by $3,056, resulting in a refund.

Yulia and Mikhail Had a Joint Taxable Income of $58,700;