Michael, 66, and Holly, 55, reported the following information for 2021:

Michael and Holly are married and have 4 children. Michael Jr. is 26 and lives with his parents who provide most of his support. His gross income for the year was $3,000. Their other children are 8, 10, and 17 years old.

Michael worked for Dunder Mifflin. His salary was $230,000 and from that he chose to place $4,000 in a dependent care FSA and $2,500 in a medical FSA. Dunder Mifflin paid $25,000 in health insurance benefits for Michael.

Michael was injured on the job and received $10,000 in workers compensation benefits.

Holly is a 40% limited partner in Sprinkles, Inc, a partnership. Sprinkles had ordinary income of $500,000 and dividend income of $20,000. Additionally, Holly received distributions from the partnership of $55,000 over the year.

Holly won an award of $4,000 for her volunteer work she does with the local humane society. She gave the money away to a good friend with financial trouble.

Michael likes to gamble. His gambling winnings for the year totaled $3,800. His gambling losses were $1,200.

Michael and Holly had for AGI deductions totaling $8,000 and total itemized deductions of $26,000.

Calculate their 2021 gross income, AGI, taxable income (label all three), and eligible child and dependent tax credit (ignore the special 2021 rules).

Answer rating: 100% (QA)

Solution Their other children are 8 10 and 17 years old 200025002400010005000 Dunder Mi... View the full answer