Reference no: EM131556093

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? ______________________________