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Comprehensive Problem 4-57 (LO 4-1, LO 4-2, LO 4-3) (Algo)

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Demarco and Janine Jackson have been married for 20 years and have four children (no children under age 6 at year-end) who qualify as their dependents (Damarcus, Jasmine, Michael, and Candice). The couple received salary income of $97,000 and qualified business income of $18,000 from an investment in a partnership, and they sold their home this year. They initially purchased the home three years ago for $240,000 and they sold it for $290,000. The gain on the sale qualified for the exclusion from the sale of a principal residence. The Jacksons incurred $18,100 of itemized deductions, and they had $4,000 withheld from their paychecks for federal taxes. They are also allowed to claim a child tax credit for each of their children. However, because Candice was 18 years of age at year end, the Jacksons may claim a child tax credit for other qualifying dependents for Candice. (Use the tax rate schedules.)

Comprehensive Problem 4-57 Part-a (Algo)

a. What is the Jacksons' taxable income, and what is their tax liability or (refund)?

Note: Do not round intermediate calculations.

using 2022 TAX RATES

1. Gross income :
2. Adjusted gross income:
3. Standard deductions :
4. Itemized deductions:
5. Deduction for qualified business income:
6. Total deductions from AGI:
7. Taxable income:
8. Income tax liability:
9. Other taxes :
10. Total tax :

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