Ralph and Josee have adjusted gross income of $53,000.They have itemized deductions of $18,000 and incurred $2,000 in college expenses for their daughter who is a freshman at a local community college.They file jointly and have three exemptions at $4,000 each.Compute their tax liability for the current year.
A) $227
B) $1,170
C) $255
D) $2,780

Question

Quizplus · Accepted Answer

To compute their tax liability, first subtract the standard deduction for married filing jointly ($24,000) from their AGI ($53,000), resulting in $29,000. Then subtract the exemptions (3 x $4,000 = $12,000) from $29,000, leaving $17,000 taxable income. Using the tax brackets, calculate the tax on $17,000. The tax liability is $227.

Ralph and Josee Have Adjusted Gross Income of $53,000