Question

juan is a single father of 3 filing as a Head of Household. His income reported on his W-2 was $98,066 and he had interest and dividend income reported on a 1099 of $2,454. During the year, Juan had state and local taxes withheld $5,864, paid property tax of $6,487, paid $6,846 in mortgage interest, and had $8,147 in charitable contributions. The exemption amount for this year is $4,000. Use the table below to calculate their tax. If Juan's W-2 showed Federal Tax Withheld of $11,799, will he be receiving a refund or owe more taxes? How much?

Answer 1

Using the information provided, we can calculate Juan's taxable income and then use the tax table to determine his federal income tax liability. Here are the calculations:

Juan's total income:

W-2 income: $98,066

Interest and dividends: $2,454

Total: $100,520

Juan's adjustments:

Exemption amount: $4,000

Adjusted Gross Income (AGI):

Total income - Exemption amount

$100,520 - $4,000 = $96,520

Juan's deductions:

State and local taxes: $5,864

Property tax: $6,487

Mortgage interest: $6,846

Charitable contributions: $8,147

Total deductions: $27,344

Juan's taxable income:

AGI - Deductions

$96,520 - $27,344 = $69,176

Using the tax table for Head of Household filers, Juan's federal income tax liability is approximately $12,998.

Juan's federal tax withheld from his W-2 is $11,799. Since this amount is less than his tax liability of $12,998, he will owe additional taxes of approximately $1,199.

Therefore, Juan will owe an additional $1,199 in federal income taxes when he files his tax return.

Explanation:

Answer 2

To calculate Juan's tax liability, we need to first determine his taxable income. We can do this by subtracting his exemptions and deductions from his total income:

Total income: $98,066 + $2,454 = $100,520

Exemption amount: $4,000

Standard deduction for Head of Household: $9,350 (for 2017)

Itemized deductions: $5,864 + $6,487 + $6,846 + $8,147 = $27,344

Total deductions: $9,350 + $27,344 = $36,694

Taxable income: $100,520 - $4,000 - $36,694 = $59,826

Using the tax tables for 2017, we can calculate Juan's tax liability:

Taxable income: $59,826

Tax liability: $10,517.50

Juan's W-2 shows that $11,799 was withheld for federal taxes, which is more than his calculated tax liability of $10,517.50. Therefore, Juan will receive a refund.

Refund amount: $11,799 - $10,517.50 = $1,281.50

Therefore, Juan will receive a refund of $1,281.50.