Calculate tax liability

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Reference no: EM13330132

Ron, age 64, is an account executive for Cobb Advertising, Inc. Ron's annual salary is $80,000. Other benefits paid by Cobb for Ron were:

Health and accident insurance $1,500
Group-term life insurance Policy $120,000 in coverage
Payment of country club dues $3,660
Payment of dues to professional organizations and subscriptions to trade journals $550
Parking space in parking garage $3,120
Matching contributions to qualified pension plan. Ron contributes the maximum that will be matched - 5% of his salary. $4,000
Christmas cash bonus $125
Reimbursement for college course under a non-discriminatory plan $3,500

Ron is married to Raquel, age 65. Raquel retired last year. This year she received $20,000 in Social Security payments. Ron and Raquel also have income from these sources:

Interest from joint savings account $980
Tax-exempt interest $1,000
Value of building inherited from Ron's grandfather $80,000
Rental income received from inherited building $2,820


Required:
A. Compute the couple's taxable income assuming they will use the standard deduction.
B. Calculate their tax liability.

Reference no: EM13330132

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