Adam Attended College for Much of 2015,during Which Time He

question 52

Essay

Adam attended college for much of 2015,during which time he was supported by his parents.Erin married Adam in December 2015.They live in a common law state.Adam graduated and will commence work in January 2016.Erin worked during 2015 and earned $20,000.Adam's only income was interest of $1,100.Adam's parents are in the 28% tax bracket.Thus,claiming Adam as a dependent would save them $1,120 ($4,000 × .28).
a.What is Erin and Adam's tax liability if they file a joint return?
b.What is Erin and Adam's total tax liability if they file separate returns and Adam's parents claim him as a dependent?

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Definitions:

Just-In-Time Manufacturing

Just-in-time manufacturing is an inventory management strategy where materials are produced or acquired only as needed, reducing waste and improving efficiency.

Inventories

Materials and goods held by a business for the purpose of resale, production, or as raw materials.

Production Operations

The activities involved in creating goods and services through the transformation of materials, labor, and technology.

Institute of Management Accountants

The Institute of Management Accountants (IMA) is a professional organization dedicated to fostering the development of management accounting practices and supporting management accountants globally.