Return to the facts of Example 11. Grace’s taxable income is $43,600. Now further E X A M P L E 4 0 assume that Grace reports the following: income tax withheld, $2,300; estimated tax payments, $3,600; and a credit for dependent care expenses, $200. Grace’s net tax payable is computed as follows.

Income tax (from 2012 Tax Rate Schedule for

 

$5,920

Head of Household, Appendix A, rounded)

 

 

Less: Tax credits and prepayments—

 

 

Credit for dependent care expenses

$200

 

Income tax withheld

2,300

 

Estimated tax payments

3,600

(6,100)

Net taxes payable (or refund due if negative)

 

($180)