Barrett and Betina Are Planning to Be Married on December

question 109

Essay

Barrett and Betina are planning to be married on December 26, 2014. Barrett's salary for 2014 is $42,000 and Betina's is $40,000. Barrett pays mortgage interest of $7,200 and property taxes of $1,800; Betina has $400 of charitable contributions. Barrett earns interest of $1,450 on a savings account and makes a deductible for AGI contribution to his IRA of $2,000. Betina makes a $1,000 deductible contribution to her IRA. Amounts withheld for State taxes are $1,900 for Barrett and $1,800 for Betina. Based on the above information, answer the following questions to help Barrett and Betina prepare their 2014 tax return they will file jointly and have no other dependents):
a. What is their Adjusted Gross Income AGI) for 2014?
b. What is their taxable income and tax liability?
c. If Barrett and Betina don't get married until January 2015, what is Barrett's taxable income and tax liability?
d. If Barrett and Betina don't get married until January 2015, what is Betina's taxable income and tax liability?
e. From a purely tax standpoint, should Barrett and Betina get married in December or January?

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Definitions:

Self-Reliance

Self-reliance is the ability of an individual to depend on their own capabilities, resources, and judgments.

Slow-To-Warm-Up Temperament

A temperament style in children who typically show mild reactions to their environment and new experiences and take longer to adjust to new situations.

Easy Temperament

A temperament characterized by a positive mood, regular bodily functions, and adaptability; children with this temperament generally show low or moderate intensity of reaction and a high level of self-regulation.

Difficult Temperament

A behavioral profile in children characterized by high reactivity, poor adaptability, and a tendency toward negative emotions.