Reference no: EM131262319
Martin S. Albert (Social Security number 111-11-1111) is 39 years old and is married to Michele R. Albert (Social Security number 123-45-6789). The Alberts live at 512 Ferry Road, Newport News, VA 23601. They file a joint return and have two dependent children, Charlene, age 17, and Jordan, age 18. Charlene's Social Security number is 123-45-6788, and Jordan's Social Security number is 123-45-6787. In 2016, Martin and Michele had the following transactions: 1. Martin received $120,000 in salary from Red Steel Corporation, where he is a construction engineer. Withholding for Federal income tax was $10,750. The amounts withheld for FICA taxes were as follows: $7,049 ($113,700 × 6.2%) for Social Security and $1,740 ($120,000 × 1.45%) for Medicare. Martin worked in Mexico from January 1, 2015, until February 15, 2016. His $120,000 salary for 2016 includes $18,000 he earned for January and one-half of February 2016 while working in Mexico. 2. Martin and Michele received $800 in qualified dividends on Green, Inc. stock and $400 interest on Montgomery County (Virginia) school bonds. 3. Martin received $2,300 interest from a Bahamian bank account. 4. Michele received 50 shares of Applegate Corporation common stock as a stock dividend. The shares had a fair market value of $2,500 at the time Michele received them, and she did not have the option of receiving cash. 5. Martin and Michele received a $1,200 refund on their 2015 Virginia income taxes. Their itemized deductions in 2015 totaled $14,000. 6. Martin paid $6,600 alimony to his former wife, Rose T. Morgan (Social Security number 123-45-6786). 7. Martin and Michele kept the receipts for their sales taxes paid of $1,100. 8. Martin and Michele's itemized deductions were as follows: • State income tax paid and withheld totaled $5,100. • Real estate taxes on their principal residence were $3,700. • Mortgage interest on their principal residence was $2,500. • Cash contributions to the church totaled $2,800. Requirement: Use the tax formulas to compute the Alberts's net tax payable (or refund due) for 2016.
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