James and Brittany are married, and they are filing their 2020 federal income taxes jointly. Suppose $80 is deducted from each of James's monthly paychecks for health insurance, and $125 is deducted from each of Brittany's monthly paychecks for health insurance. Recall from Part 2 of the project that James and Brittany make contributions to their 401(k) plans with each of their monthly paychecks. When finding their annual taxable income, how much are the benefits? 

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2. When finding their annual taxable income, how much are the deductions? Note: Your answer should be the amount that they will claim for their deductions when they file their taxes. Here is the relevant information: 
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   2. For 2020, the standard deduction for a married couple filing jointly is $24,800.
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   4. James and Brittany paid $2,503.28 in state taxes and $2,446.20 in local taxes for 2020.
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   6. Recall that James and Brittany bought a house in Part 3 of the project, and the mortgage interest and property taxes are itemized deductions. For simplicity, assume that their first mortgage payment occurred on January 1, 2020.
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   8. Recall that James and Brittany have a student loan from Part 1 of the project. Student loan interest is a special case. They can claim the student loan interest deduction Links to an external site. Even if they don't itemize their deductions. For simplicity, assume that their first student loan payment occurred on January 1, 2020. 
   9.  
   James annual income: $39,000

   Brittany annual income: $52,800

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5. Find their annual taxable income for 2020. Use their salaries given in Part 2 of the project. 
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7. Calculate their federal income taxes for 2020. Use the following tax rate chart: 
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If Taxable Income Is:	The Tax Is:
Not over $19,750	10% of the taxable income
Over $19,750 but not over $80,250	$1,975 plus 12% of the excess over $19,750
Over $80,250 but not over $171,050	$9,235 plus 22% of the excess over $80,250
Over $171,050 but not over $326,600	$29,211 plus 24% of the excess over $171,050
Over $326,600 but not over $414,700	$66,543 plus 32% of the excess over $326,600
Over $414,700 but not over $622,050	$94,735 plus 35% of the excess over $414,700
Over $622,050	$167,307.50 plus 37% of the excess over $622,050

5. Suppose $210.42 was withheld from each of James's monthly paychecks in 2020 for federal income taxes, and $280.70 was withheld from each of Brittany's monthly paychecks in 2020 for federal income taxes. Will they receive a refund or owe money to the IRS after they file their taxes?

6. How much money will they receive as a refund or have to pay to the IRS after they file their taxes?

7. Calculate their annual FICA taxes for 2020. Here is the relevant information:

a. FICA taxes are based on their gross incomehealth insurance deductions.

b. They're required to pay FICA taxes on their 401(k) contributions, so you should NOT subtract their 401(k) contributions.

c. FICA taxes include 6.2% for Social Security and 1.45% for Medicare.

Answer rating: 100% (QA)

Okay based on the information provided Health insurance benefits James 80month deducted from p... View the full answer