Paul is 66 years old and Tina is 62 years old. They file a joint return. They support their 22-year-old son, Jed, who is a full-time student. He earns $4,000 per year as a waiter at a restaurant.
Wages.................................................................... $ 170,000
Interest from savings............................................... $12,000
Interest on NYS qualified bonds................................ $7,000
Inheritance from Tina’s Aunt Lucy............................ $6,000
Alimony paid to Paul’s ex-wife.................................. $8,000
Child support from Tina’s ex-husband Eric.............. $10,000
Prize from contest at church....................................... $1,000
Dividend from ABC Corp. stock............................... $2,000
Paul and Tina own a house in Whitestone. The costs associated with the house were as follows:
Mortgage interest $7,000
Real estate taxes $8,000
They paid hospital bills of $7,000 and doctor’s bills of $6,000. Their medical insurance company reimbursed them in the amount of $3,000 for the doctor’s bills. They had prescriptions in the amount of $500 and a yearly vitamin expense of $200.
Their charitable contributions included:
$2,000 paid to St. Mary’s Church
$ 500 paid to Mr. and Mrs. Elm whose house was damaged in a flood
Answer the questions in the space provided.
What is Paul’s and Tina’s adjusted gross income? ___________________
What is Paul and Tina’s personal/dependency exemption? ______________________
What is Paul and Tina’s standard deduction without regard to their itemized deductions?_______________________
What is Paul and Tina’s net itemized deduction? ________________________
What is Paul and Tina’s tax liability? ______________________________