Jane and Ed Rochester Are Married with a 2-Year-Old Child

question 112

Essay

Jane and Ed Rochester are married with a 2-year-old child, who lives with them and whom they support financially. In 2020, Ed and Jane realized the following items of income and expense:
The Rochester's qualified for a $2,000 child tax credit and $2,900 in recovery rebate credit ($2,400 for themselves and $500 for their child). Assume the Rochesters did not receive the recovery rebate in advance. Their employers withheld $5,800 in federal income taxes from their paychecks (in the aggregate). Finally, the 2020 standard deduction amount for MFJ taxpayers is $24,800.
What is the couple's tax due or tax refund? (Use the tax rate schedules, not tax tables.)

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Definitions:

Standard Deviation

A statistic that measures the dispersion of a dataset relative to its mean, indicating how spread out the data points are.

Unbiased Estimates

Refers to statistical estimates that are expected to be equal to the true values of the parameter being estimated, showing no systematic error.

Population Estimates

Calculations that infer the number of individuals in a population at a certain time.

Variability

How much the data points in a statistical distribution or dataset deviate from the mean or average.