Answer:
Since we are not given any specific year, I will use the 2020 tax schedule:
Marc and Michelle's gross income = Marc's and Michelle's salaries + interest from corporate bonds = $64,000 + $12,000 + $500 = $76,500
they should choose the standard deduction since it is higher than their itemized deductions = ($24,400)
contribution to IRA = ($2,500)
alimony payment = ($1,500) the divorce agreement was settled before 2019
Marc and Michelle's taxable income = $48,100
Marc and Michelle's tax liability = $1,975 + [12% x ($48,100 - $19,750)] = $5,377
Interests on municipal bonds is not taxable.
The amount of taxes that they owe = $5,377 - $3,500 (federal tax withholdings) = $1,877
Since they are allowed a $2,000 child tax credit, that will wipe out any taxes owed and result in a $2,000 - $1,877 = $123 refund.