During All of 2014, Mr A What Is the Clays' Taxes Payable or (Refund Due)

question 55

Essay

During all of 2014, Mr. and Mrs. Clay lived with their four children (all are under the age of 17). They provided over one-half of the support for each child. Mr. and Mrs. Clay file jointly for 2014. Neither is blind, and both are under age 65. They reported the following tax-related information for the year $\begin{array}{c}\begin{array}{lll}\text{Salary income}\\\text{Prize from local radio station}\\\\\text{Medical expenses (no health insurance)}\\\text{Real estate taxes}\\\text{Alimony paid by Mr. Clay}\\\text{State income taxes withheld in 2014}\\\text{State income taxes paid with 2014 tax (return was filed}\\ \quad\text{in April, 2015)}\\\text{Federal income tax withholding}\\\text{Qualified home mortgage interest}\\\text{Charitable contributions}\\\end{array}\begin{array}{lll}&&\end{array}\begin{array}{lll}\$ 125,000 \\1,500\\\\4,000\\4,200\\12,000\\1,800\\\\1,500\\7,500\\11,000\\4,000\\\end{array}\end{array}$ A. What is the Clays' taxes payable or (refund due) (ignore the alternative minimum tax)?
B. What is the Clays' tentative minimum tax and alternative minimum tax?

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Definitions:

Degrees of Freedom

Refers to the number of independent values or quantities which can be assigned to a statistical distribution.

Critical Value

A point on the scale of the test statistic beyond which we reject the null hypothesis, representing a threshold chosen to determine the significance of the test statistic.

Independent Variables

Factors that are manipulated or changed in an experiment to determine their effect on dependent variables.

Multiple Coefficient

Often refers to the coefficient of determination (R^2) in multiple regression analysis, indicating the proportion of variance in the dependent variable predictable from the independent variables.