Reference no: EM131676967

Question - Emily and David Chen claim their three children, age 5-10, as dependents. During 2016, Emily worked full time and earned $39,850. Emily's employer provides her with family health care coverage that complies with the ACA mandate. Her employer withheld nothing for federal income taxes. David attended college full-time for the entire year. Other than Emily's wages, the couple's only other source of earned income is $800 of taxable interest. (David received a tax-free scholarship that paid for his tuition, book, and fees.) The Chen paid $2,500 in qualified childcare expenses so that Emily could work and David could attend college. Compute the couple's taxable income and taxes owed (to be refunded) on their 2016 join tax return. The couple uses the standard deduction. They are both under age 65 and have no problem with their vision.