<u>The total amount of deductions Marc and Michelle are going to get is $24750. </u>
<u>The taxable income of Marc and Michelle is $47750. </u>
Further Explanation:
Income Tax: It is the additional charge on an individual’s income which he/she needs to pay to the government. The taxable income is calculated by adding all the incomes and deducting all the deductions which an individual can claim on his/her income.
Compute the total amount of deductions available for Marc and Michelle:
Total Deduction Available
= Higher of Standard Deduction for MJF and Itemized Deduction + Personal and Dependency Exemptions
= Higher of $12600 and $6000 + $12150 ($4050×3)
= $12600 + $12150
=$24750.
<u>Therefore, the total deductions available to Marc and Michelle are $24750.
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Gross Income of Marc and Michelle
= Salary of Marc + Salary of Michelle + Interest Earned on Corporate Bonds
= $64000 + $12000 + 500
= $76500.
Total Taxable Income of Marc and Michelle
= Gross Income – Qualified Moving Expenses – Alimony Paid – Total Deductions
= $76500 - $2500 - $1500 - $$24750
= $47750.
<u>Therefore, the total taxable income of Marc and Michelle is $47750.
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Learn More:
1. Learn more about the tax on the profit from selling the fixed assets
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2. Learn more about the personal tax
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3. Learn more about the role of money
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Answer details:
Grade: Senior School
Subject: Taxation
Chapter: Income Tax
Keywords: Taxable income, Marc and Michelle, Deductions, salary income, earned, corporate bond interest, interest on municipal bond, standard deductions, US tax brackets.
