1a. Melissa is a 35 year-old single taxpayer with adjusted gross income of $49,600. She uses the standard deduction and has no dependents, so only uses one personal exemption.
a) Calculate Melissa's tax liability.
b) Using the 2016 tax tables, what is Melissa's tax liability?
1b. In the tax law, the definition of gross income is:
a. All cash payments received unless excluded by the tax code
b. All cash payments received for services performed
c. All income from whatever source derived
d. All income of any kind unless the income is earned illegally
Laura and Leon were granted a divorce in 2011. In accordance with the decree, Leon made the following payments to Laura in 2016:
Child support payments contingent on the age of the child: $6,000
Annual cash payments, OTHER than child support, specified as alimony in the divorce agreement: $4,000
How much should Laura include in her 2016 taxable income as alimony?
a. $0
b. $4,000
c. $6,000
d. $10,000