Problem 1 ITA:

Problem 1                                                                                                                                   ITA: 118; IT-513R

Jack and Jill were married on December 1, 2017. Jill and her two children of a previous marriage moved into Jack’s home. Jill’s children are 14 and 16 and have no income.

Jack and Jill have the following income for tax purposes for 2017:

                                                                                       Prior to the                      Subsequent to                 

marriage                            the marriage

Jack……………………………………………………………………….$33,000              $3,000

Jill………………………………………………………………………….$9,800                 $800

You have been asked to:

A)    Determine the optimum personal tax credits under section 118 for both Jack and Jill for 2017

B)    How would your answer change in 2018 of the income levels remain the same