Question

-Jason is a California resident who lives and works as a computer consultant in Walnut Creek. He earned $75,000 while working for XYZ LTD in 2016. Jason additionally had a contract job from ABC Co. based in Washington. His contract earnings totaled $17,000 in 2016 and will total $15,000 in 2017. On what income amount will Jason be taxed in 2016?

a) $75,000

b) $83,500

c) $90,000

d) $92,000

-Joe and Kathy are married and domiciled in California. Joe works full-time in Arizona and has nonresident status while Kathy remains a California resident. Joe earned $66,000 in 2016 and Kathy earned $32,000. Which of the following statements is true with respect to Kathy and Joe?

a) Kathy need only pay California income tax on her earnings of $32,000

b) Kathy must pay income tax on all of her earnings plus one-half of Joe’s earnings based on community income

c) Kathy must pay California income tax on all of her earnings plus all of Joe’s earnings based on community income

d) Kathy has no California filing obligation because of her husband’s nonresident status

Answer 1

ANSWER (d)

Total earnings of Jason in 2016 is-

1. In XYZ LTD, he earned              $ 75000
2. He earned in contract job       $ 17000

Therefore, total amount

earned by Jason in 2016=      $ 92000

Therefore, in 2016, Jason will be taxed on $ 92000

NOTE- $15000 has been earned by Jason in 2017, therefore this income will not be taxed in year 2016

ANSWER (d)

Total earnings of Jason in 2016 is-

1. In XYZ LTD, he earned              $ 75000
2. He earned in contract job $ 17000

Therefore, total amount

earned by Jason in 2016=   $ 92000

Therefore, in 2016, Jason will be taxed on $ 92000

NOTE- $15000 has been earned by Jason in 2017, therefore this income will not be taxed in year 2016