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Dave CPA
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ASSUME that it costs $15,000 to support one person for an entire

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ASSUME that it costs $15,000 to support one person for an entire year. Determine maximum number of dependents and most advantageous filing status for taxpayer. Tax year is 2013 Morris (66) and his kids Robin (turned 19 on February 1) & Barry (turned 13 on October 1) live in the same house with Morris’s parents, Hugh (88, blind) and Barb (84). Morris’s wife died in 2011. Robin, a full-time college student, earned $720 a month, which is used for her own support. Barry earned $900 during the summer mowing lawns. Morris’s parents are retired and jointly receive $10,000 a year from social security. Out of Morris's $80,000 game show winnings, and $50,000 annual payment from the life insurance on his deceased wife, he provides the rest of everyone’s support and pays for Barry’s after school care ($300 during school months: Jan - May; Sept - Dec). Names of Morris's exemptions Morris's filing status Morris's Standard Deduction Amount of gross income for Morris Amount of Morris’s Credits What is Barry’s standard deduction


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Morris filing status is Head of Household and he has three exemptions Barry, Hugh and Barb. Morris's standard deduction is $8,950 and his gross income is $80,000 (life insurance is excluded from gross income). There are two credits. One for $1,000 in relation to the child tax credit for Barry since he is under 17 and the other is child care credit for $600 (3,000 X 20%). Barry's standard deduction is zero since he doesn't have to file a return since his income was below $9,750.

Please let me know if I missed a part of the question or if you need further clarification before you rate my answer. A positive rating is what I strive for. Regards Dave
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