Help me answer this question Camille Question due Jan 30docx

Help me answer this question.

Camille Question due Jan 30.docx [Compatibility Mode] Search in Document Home Layout Document Elements Tables Charts Font Paragraph Styles Insert 11 ==|Le | Styles Text Box Camille Sikorski was divorced in 2016. She currently provides a home for her 15-year-old daughter, šaly Kalvlixed in Camille\'s home, which she owns, for the entire year, and Camille paid for all the costs of maintaining the home. She received a salary of $52,500 and contributed $4,100 of it to a qualified retirement account (a for AGI deduction). She also received $5,500 of alimony from her former husband. Finally, Camille paid $2,600 of expenditures that qualified as itemized deductions. What is Camille\'s Gross Income? $58,000 + $5,500 $58,000 ii. What is Camille\'s Adjusted Gross Incopme? Gross income+ For AGI deduction - Adjusted gross income $58,000 + ($4,100) $53,900 ii. Should Camille take itemized deductions or the standard deduction? How much? v. Does Kay qualify as Camille\'s dependent? Explain why What is Camille\'s filing status? vi. What is Camille\'s allowable deduction from AG1? vi. What is Camille\'s income tax liability before applying any applicable tax credits? Sec 1 Print Layout View

Solution

Answer iii)

Camille should take the standard deduction instead of the itemized deduction.

As she can claim higher of both a) the standard deduction I.e, $6,350/- or b) itemized deduction $ 2,600/-

Hence deduction claim will be standard deduction $6,350/-

Answer iv)

Yes, Kaly qualifies as a dependent of Camille.

A dependent is someone you support and for whom you can claim a dependency exemption. In 2017, each dependent you claim entitles you to receive a $4,050 reduction in your taxable income. You may also receive a tax credit of up to $1,000 for each dependent child under the age of 17.

As she is below 17 years old and lived with her mom, she will be treated as a dependent child.

Answer v)

Camille\'s filing status is Single.

If you are divorced, legally separated or unmarried as of the last day of the year you should use the status Single.

Answer vi)

Following are the allowable deduction of Camille from AGI:-

a) Deduction for exemptions: Total allowed after PEP adjustment $8,100

b)Standard or itemized deduction to use (higher of two options): $6,350

Answer vii)

Total tax before credits on taxable income of $39,430 is  $5,596.