US Taxation

US Taxation

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Madison, who is divorced, files as head of household. She has four dependent minor children, whom she supports. Madison’s earned income for the current year is $39,000. In addition, she paid $4,000 alimony to her ex-husband and uses the standard deduction.

Click here to access Exhibit 13.3 Earned Income Credit and Phaseout Percentages.

Carry out computations to two decimal places, and round your final answer to the nearest dollar.

Enter the amount of Madison’s earned income credit:

Question 2

PeggySue is single and supports her dependent aunt, who lives with her. PeggySue’s earned income is $12,000, and she makes a $500 contribution to her traditional IRA.

Click here to access Exhibit 13.3 Earned Income Credit and Phaseout Percentages.

Carry out computations to two decimal places, and round your final answer to the nearest dollar.

Enter the amount of PeggySue’s earned income credit: $