Sandy and John Ferguson got married eight years ago and have a seven-year-old daughter, Samantha, in...

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Sandy and John Ferguson got married eight years ago and have a seven-year-old daughter, Samantha, in 2023, Sandy worked as a computer technician at a local university, earning a salary of $152,000, and John worked part time as a receptionist for a law firm, earning a salary of $29,000. Sandy also does some Web design work on the side and reported revenues of $4,000 and associated expenses of $750. The Fergusons received $800 in qualified dividends and a $200 refund of their state income taxes. The Fergusons always itemize their deductions, get the full benefit of deducting the entire amount of state income taxes paid, and their itemized deductions were well over the standard deduction amount last year. Use Exhibit 8-10, Tax Rate Schedule. Dividends and Capital Gains Tax Rates, 2023 AMT exemption for reference. The Fergusons reported making the following payments during the year: State income taxes of $4,400. Federal tax withholding of $21,000. Alimony payments to Sandy's former spouse of $10,000 (divorced 12/31/2014). Child support payments for Sandy's child with her former spouse of $4,100. $12,200 of real property taxes. John was reimbursed $600 for employee business expenses he incurred. He was required to provide documentation for the expenses to his employer. $3,600 to Kid Care day care center for Samantha's care while Sandy and John worked. $14,000 interest on their home mortgage ($400,000 acquisition debt). $3,000 interest on a $40,000 home-equity loan. They used the loan to pay for a family vacation and new car. $15,000 cash charitable contributions to qualified charities. Donation of used furniture to Goodwill. The furniture had a fair market value of $400 and cost $2,000. a. What is the Fergusons' 2023 federal income taxes payable or refund, including any self-employment tax and AMT, if applicable? Note: Round your intermediate computations to the nearest whole dollar amount. EXHIBIT 8-10 2023 Earned Income Credit Table (1) Maximum Earned (3) Maximum Qualifying Income Eligible Children for Credit (2) Credit % Credit (1) (2) (4) Credit Phase-Out for AGI (or earned income if greater) over This Amount (5) Phase-Out Percentage No Credit When AGI (or earned income if greater) Equals or Exceeds This Amount (4)+[(3)/(5)] Married taxpayers filing joint returns 0 $7,840 7.65% $600 $16.370 7.65% $24,2101 1 11,750 34 3,995 28.120 15.98 53,120 2 16,510 401 6,604 28,120 21.06 59.478 3+ 16,510 45 7,430 28,120 21.06 63,398 All taxpayers except married taxpayers filing joint returns 0 $7,840 7.65% $600 $9,800 7.65% $17,640 1 11,750 34 3,995 21,560 15.98 46,560 2 16,510 401 6,604 21,560 21.06 52.918 3+ 16,510 45 7,430 21,560 21.06 $56,838 Source: Internal Revenue Code. "Rev. Proc. 2022-38." www.irs.gov. 2023 Tax Rate Schedules Individuals Schedule X-Single If taxable income is over: But not over: $ 0 $11,000 $ 44,725 $ 95,375 $182,100 $231,250 $578,125 $ 11,000 $ 44,725 $ 95,375 $182,100 $231,250 $578,125 The tax is: 10% of taxable income $1,100 plus 12% of the excess over $11,000 $5,147 plus 22% of the excess over $44,725 $16,290 plus 24% of the excess over $95,375 $37.104 plus 32% of the excess over $182,100 $52,832 plus 35% of the excess over $231,250 $174,238.25 plus 37% of the excess over $578,125 Schedule Y-1-Married Filing Jointly or Qualifying surviving spouse If taxable income is over: But not over: $ 0 $ 22,000 $ 89,450 $ 190,750 $364,200 $462,500 $ 693,750 $ 22,000 $ 89,450 $ 190,750 $364,200 $462,500 $693,750 The tax is: 10% of taxable income $2,200 plus 12% of the excess over $22,000 $10,294 plus 22% of the excess over $89,450 $32,580 plus 24% of the excess over $190,750 $74,208 plus 32% of the excess over $364,200 $105,664 plus 35% of the excess over $462,500 $186,601.5 plus 37% of the excess over $693,750 Schedule Z-Head of Household If taxable income is over: But not over: $ 0 $ 15,700 $ 59,850 $ 95,350 $182,100 $231,250 $578,100 $ 15,700 $ 59,850 $ 95,350 $182,100 $231,250 $578,100 The tax is: 10% of taxable income $1,570 plus 12% of the excess over $15,700 $6.868 plus 22% of the excess over $59,850 $14,678 plus 24% of the excess over $95,350 $35,498 plus 32% of the excess over $182,100 $51,226 plus 35% of the excess over $231,250 $172,623.5 plus 37% of the excess over $578,100 Schedule Y-2-Married Filing Separately If taxable income is over: But not over: $ 0 $ 11,000 $ 44,725 $ 95,375 $182,100 $231,250 $346,875 $ 11,000 $ 44,725 $ 95,375 $182,100 $231,250 $346,875 The tax is: 10% of taxable income $1,100 plus 12% of the excess over $11,000 $5,147 plus 22% of the excess over $44,725 $16,290 plus 24% of the excess over $95,375 $37,104 plus 32% of the excess over $182,100 $52,832 plus 35% of the excess over $231,250 $93,300.75 plus 37% of the excess over $346,875 Tax Rates for Net Capital Gains and Qualed Dividends Update Trable Income Nate 0% 15% Married Filing Jolatly 50-58250 $89.251-5553.AND 20% Married Filing Separsidy 30-544625 $44.626-$276,900 $276,001 Single 30544625 3443-5492,300 Head of Household Trusts and Estates 50-53000 5492301- 10-599,750 $59.751-5523010 $525054+ $300-$14.300 55233051+ This rate applies the net cpline and qualified dividends that full within the range of sable income spected in the sub (net copul and qualified dividends one included in table income le for this purp EXHIBIT 8-5 2023 AMT Exemptions Filing Status Exemption Phase-Out Begins at This Level of AMTI Phase-Out Complete for This Level of Married filing jointly $126,500 Married filing separately 63,250 $1,156,300 578,150 Head of household and single 81,300 578,150 AMTI $1,662,300 831,150 903,150 Sandy and John Ferguson got married eight years ago and have a seven-year-old daughter, Samantha, in 2023, Sandy worked as a computer technician at a local university, earning a salary of $152,000, and John worked part time as a receptionist for a law firm, earning a salary of $29,000. Sandy also does some Web design work on the side and reported revenues of $4,000 and associated expenses of $750. The Fergusons received $800 in qualified dividends and a $200 refund of their state income taxes. The Fergusons always itemize their deductions, get the full benefit of deducting the entire amount of state income taxes paid, and their itemized deductions were well over the standard deduction amount last year. Use Exhibit 8-10, Tax Rate Schedule. Dividends and Capital Gains Tax Rates, 2023 AMT exemption for reference. The Fergusons reported making the following payments during the year: State income taxes of $4,400. Federal tax withholding of $21,000. Alimony payments to Sandy's former spouse of $10,000 (divorced 12/31/2014). Child support payments for Sandy's child with her former spouse of $4,100. $12,200 of real property taxes. John was reimbursed $600 for employee business expenses he incurred. He was required to provide documentation for the expenses to his employer. $3,600 to Kid Care day care center for Samantha's care while Sandy and John worked. $14,000 interest on their home mortgage ($400,000 acquisition debt). $3,000 interest on a $40,000 home-equity loan. They used the loan to pay for a family vacation and new car. $15,000 cash charitable contributions to qualified charities. Donation of used furniture to Goodwill. The furniture had a fair market value of $400 and cost $2,000. a. What is the Fergusons' 2023 federal income taxes payable or refund, including any self-employment tax and AMT, if applicable? Note: Round your intermediate computations to the nearest whole dollar amount. EXHIBIT 8-10 2023 Earned Income Credit Table (1) Maximum Earned (3) Maximum Qualifying Income Eligible Children for Credit (2) Credit % Credit (1) (2) (4) Credit Phase-Out for AGI (or earned income if greater) over This Amount (5) Phase-Out Percentage No Credit When AGI (or earned income if greater) Equals or Exceeds This Amount (4)+[(3)/(5)] Married taxpayers filing joint returns 0 $7,840 7.65% $600 $16.370 7.65% $24,2101 1 11,750 34 3,995 28.120 15.98 53,120 2 16,510 401 6,604 28,120 21.06 59.478 3+ 16,510 45 7,430 28,120 21.06 63,398 All taxpayers except married taxpayers filing joint returns 0 $7,840 7.65% $600 $9,800 7.65% $17,640 1 11,750 34 3,995 21,560 15.98 46,560 2 16,510 401 6,604 21,560 21.06 52.918 3+ 16,510 45 7,430 21,560 21.06 $56,838 Source: Internal Revenue Code. "Rev. Proc. 2022-38." www.irs.gov. 2023 Tax Rate Schedules Individuals Schedule X-Single If taxable income is over: But not over: $ 0 $11,000 $ 44,725 $ 95,375 $182,100 $231,250 $578,125 $ 11,000 $ 44,725 $ 95,375 $182,100 $231,250 $578,125 The tax is: 10% of taxable income $1,100 plus 12% of the excess over $11,000 $5,147 plus 22% of the excess over $44,725 $16,290 plus 24% of the excess over $95,375 $37.104 plus 32% of the excess over $182,100 $52,832 plus 35% of the excess over $231,250 $174,238.25 plus 37% of the excess over $578,125 Schedule Y-1-Married Filing Jointly or Qualifying surviving spouse If taxable income is over: But not over: $ 0 $ 22,000 $ 89,450 $ 190,750 $364,200 $462,500 $ 693,750 $ 22,000 $ 89,450 $ 190,750 $364,200 $462,500 $693,750 The tax is: 10% of taxable income $2,200 plus 12% of the excess over $22,000 $10,294 plus 22% of the excess over $89,450 $32,580 plus 24% of the excess over $190,750 $74,208 plus 32% of the excess over $364,200 $105,664 plus 35% of the excess over $462,500 $186,601.5 plus 37% of the excess over $693,750 Schedule Z-Head of Household If taxable income is over: But not over: $ 0 $ 15,700 $ 59,850 $ 95,350 $182,100 $231,250 $578,100 $ 15,700 $ 59,850 $ 95,350 $182,100 $231,250 $578,100 The tax is: 10% of taxable income $1,570 plus 12% of the excess over $15,700 $6.868 plus 22% of the excess over $59,850 $14,678 plus 24% of the excess over $95,350 $35,498 plus 32% of the excess over $182,100 $51,226 plus 35% of the excess over $231,250 $172,623.5 plus 37% of the excess over $578,100 Schedule Y-2-Married Filing Separately If taxable income is over: But not over: $ 0 $ 11,000 $ 44,725 $ 95,375 $182,100 $231,250 $346,875 $ 11,000 $ 44,725 $ 95,375 $182,100 $231,250 $346,875 The tax is: 10% of taxable income $1,100 plus 12% of the excess over $11,000 $5,147 plus 22% of the excess over $44,725 $16,290 plus 24% of the excess over $95,375 $37,104 plus 32% of the excess over $182,100 $52,832 plus 35% of the excess over $231,250 $93,300.75 plus 37% of the excess over $346,875 Tax Rates for Net Capital Gains and Qualed Dividends Update Trable Income Nate 0% 15% Married Filing Jolatly 50-58250 $89.251-5553.AND 20% Married Filing Separsidy 30-544625 $44.626-$276,900 $276,001 Single 30544625 3443-5492,300 Head of Household Trusts and Estates 50-53000 5492301- 10-599,750 $59.751-5523010 $525054+ $300-$14.300 55233051+ This rate applies the net cpline and qualified dividends that full within the range of sable income spected in the sub (net copul and qualified dividends one included in table income le for this purp EXHIBIT 8-5 2023 AMT Exemptions Filing Status Exemption Phase-Out Begins at This Level of AMTI Phase-Out Complete for This Level of Married filing jointly $126,500 Married filing separately 63,250 $1,156,300 578,150 Head of household and single 81,300 578,150 AMTI $1,662,300 831,150 903,150