John (age 66) and Mary (age 59) Smith are married and file a joint federal tax return. They have 2 dependent children in college ages 20 & 22. John and Mary have the following information for 2019:
Income:
John’s Salary $ 120,000
Mary’s Salary $ 80,000
Interest Income from taxable bonds $ 8,000
Proceeds from a life insurance policy $ 50,000
(John’s aunt passed away)
Deductions:
Alimony paid to Mary’s ex-spouse $ 25,000
(pre 1/1/19 divorce)
Itemized deductions
Charitable donations $ 5,000
NJ State Income Tax $ 11,000
Real Estate Taxes $ 9,000
John had $ 19,500 in federal withholding tax withheld from his pay, while Mary had 12,000 withheld.
A – Calculate the Smith’s 2019 Gross Income.
B – Calculate the Smith’s 2019 AGI.
C – Calculate the Smith’s 2019 Taxable Income
D – Calculate the Smith’s refund or balance due
