Jeremy earned $101,000 in salary and $7,000 in interest income during the year. Jeremy’s employer withheld $11,000 of federal income taxes from Jeremy’s paychecks during the year. Jeremy has one qualifying dependent child who lives with him. Jeremy qualifies to file as head of household and has $27,200 in itemized deductions. (Use the tax rate schedules.) A. Determine Jeremy’s tax refund or taxes due.

$786

Explanation:

Jeremy’s tax refund or taxes due can be calculated as follows

Gross income (101000+7000)                                        108,000

For AGI deductions                                                            0

Adjusted gross income                                                   108,000

Standard deduction                             18,350

Itemized deductions                            27,200

Greater of standard deductions/itemized deductions   (27,200 )

Taxable income                                                                 80,800

Income tax liability                                                             $12,214

(6065+(22%*(80800-52850)))

Child tax credit                                                                     (2,000)

Tax withholding                                                                    (11,000 )

Taxes refund                                                                        $(786)

answer; a large down payment,a longer term loan, would result in a lower monthly payment;