Chapter 14, Problem 28AP

Mr. and Mrs. Coulter have four dependent children, ages 1, 4, 7, and 11. Mr. Coulter’s salary was $21,400, Mrs. Coulter’s wages totaled $16,200, and the couple had no other income or above-the-line deductions this year. The Coulters paid $3,600 for day care and after-school child care.

1. a. Compute the Coulters’ child credit.
2. b. Compute the Coulters’ dependent care credit.
3. c. Recompute the Coulters’ child and dependent care credits if Mr. Coulter’s salary was $200,000, Mrs. Coulter’s wages totaled $232,000, and the couple earned $5,700 taxable interest income.