Demarco and janine jackson have been married for 20 years and have four children who qualify as their dependents (damarcus, janine, michael, and candice). the couple received salary income of $100,000, and they sold their home this year. they initially purchased the home three years ago for $200,000 and they sold it for $250,000. the gain on the sale qualified for the exclusion from the sale of a principal residence. the jacksons incurred $16,500 of itemized deductions, and they had $6,250 withheld from their paychecks for federal taxes. they are also allowed to claim a child tax credit for each of their children. (use the tax rate schedules.)

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jepessoa jepessoa · Answer 1 · 2020-09-21T02:01:26+02:00

Answer:

Using the 2019 tax schedules, the Jacksons should receive a refund of $5,573.

Explanation:

UI used the 2019 tax brackets since no year was given and 2019 is the last one due.

The $50,000 gain resulting from the sale of their house qualifies for exclusion, then it will not be included in their tax liabilities.

AGI = $100,000 (only salary income, no other income reported)

itemized deductions = $16,500

standard deduction for married filing jointly = $24,400 (this is larger, so we will select the standard deduction)

total taxable income = $100,000 - $24,400 = $75,600

total tax liability = $1,975 + [12% x ($75,600 - $19,750)] = $8,677

withheld taxes = $6,250

taxes owed = $2,427

child credits = 4 x $2,000 = $8,000

net tax liability = $2,427 - $8,000 = ($5,573) which are refundable

This means that the Jacksons should receive a refund of $5,573.

(Up to $1,400 of the child tax credit is refundable per child, so up to $1,400 x 4 = $5,600 are refundable)