Dong and Chen are a married couple with two dependent children under the age of 17. Their adjusted gross income is $ 328 comma 500.00​, and they plan to take the standard deduction. Calculate their total tax as well as the child tax credit that they can claim for the 2020 tax year. Assume that their filing status is married filing jointly spouse and that all of their income is taxable and the amount does not include any dividends or capital gains.

To calculate Dong and Chen's total tax and the child tax credit for the 2020 tax year, we need to go through the following steps:

### Step 1: Calculate the Standard Deduction

For the 2020 tax year, the standard deduction for "Married Filing Jointly" is:

\[
\text{Standard Deduction} = \$24,800
\]

### Step 2: Calculate the Taxable Income

The taxable income is calculated by subtracting the standard deduction from the adjusted gross income (AGI):

\[
\text{Taxable Income} = \text{AGI} - \text{Standard Deduction}
\]

\[
\text{Taxable Income} = 328,500 - 24,800 = 303,700
\]

### Step 3: Calculate the Federal Income Tax

For 2020, the federal tax brackets for "Married Filing Jointly" are as follows:

- **10%** on income up to $19,750
- **12%** on income over $19,750 up to $80,250
- **22%** on income over $80,250 up to $171,050
- **24%** on income over $171,050 up to $326,600
- **32%** on income over $326,600 up to $414,700
- **35%** on income over $414,700 up to $622,050
- **37%** on income over $622,050

Dong and Chen's taxable income is $303,700. Let's calculate the tax by applying the appropriate tax rates to each portion of their income:

\[
\text{Tax} = 0.10 \times 19,750 + 0.12 \times (80,250 - 19,750) + 0.22 \times (171,050 - 80,250) + 0.24 \times (303,700 - 171,050)
\]

Let's compute these values.The total federal income tax for Dong and Chen based on their taxable income of $303,700 is **$61,047.00**.

### Step 4: Calculate the Child Tax Credit

For the 2020 tax year, the child tax credit is $2,000 per qualifying child under the age of 17. Since Dong and Chen have two dependent children under 17, the initial child tax credit is:

\[
\text{Initial Child Tax Credit} = 2 \times 2000 = 4000
\]

However, the child tax credit is phased out for higher incomes. The phase-out begins at an AGI of $400,000 for "Married Filing Jointly." Since their AGI is $328,500, they do not exceed this threshold, and they can claim the full credit of **$4,000**.

### Summary

- **Total Taxable Income:** $303,700
- **Total Tax:** $61,047.00
- **Child Tax Credit:** $4,000

### Total Tax After Child Tax Credit

\[
\text{Total Tax After Credit} = \text{Total Tax} - \text{Child Tax Credit} = 61,047 - 4,000 = 57,047
\]

So, Dong and Chen's **total tax after applying the child tax credit** is **$57,047**.

Would you like more details or have any questions?

### Related Questions:
1. How does the phase-out for the Child Tax Credit work for different income levels?
2. What are the differences between the standard deduction and itemized deductions?
3. How are other credits like the Earned Income Tax Credit calculated?
4. What are the 2021 tax brackets and how have they changed from 2020?
5. How is the Additional Child Tax Credit calculated if the regular credit is reduced to zero?

**Tip:** Always consider both federal and state taxes when calculating total tax liability.

Dong and Chen are a married couple with two dependent children under the age of 17. Their adjusted gross income is $328,500.00, and they plan to take the standard deduction. Calculate their total tax as well as the child tax credit that they can claim for the 2020 tax year. Assume that their filing status is married filing jointly spouse and that all of their income is taxable and the amount does not include any dividends or capital gains.

Learn how to calculate the total federal tax and child tax credit for a married couple, Dong and Chen, in the 2020 tax year. With an AGI of $328,500 and two children under 17, this solution explains how standard deductions, tax brackets, and the child tax credit work together to determine a total tax of $57,047.

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