Question

For 2018 taxes (only answer if you know current tax law and exclusions for filing in...

For 2018 taxes (only answer if you know current tax law and exclusions for filing in 2019)

Mel, a single taxpayer, received the following items in 2018. Dividends of $450, wages of $32,000, child support from his ex-spouse of $400 per month, a new telelvision worth $1200 from a door prize at a professional conference he attended., a gift of $3,000 from his parents, and $200 of interest on bonds issued by the State of Arizona. Mel put $4,000 of his wages into his employer's dependent care flexible spending account (the $4,000 has not been deducted from his $32,000 in wages listed previously). He also receives a reimbursement of $270 per month to pay for public transportation passes each month (the monthly reimbursement of $270 has not been deducted from the $32,000 in wages). Based on the above, what is Me's gross income for 2018? Show supporting answers below.

Homework Answers

Answer #1
Particulars Amount Explanation
Dividends $        450
Wages $ 32,000
Child support $           -   Exempt from tax
Prize $     1,200
Gift from parents $     3,000 Exempt from tax
Interest on state bonds $           -   Exempt from tax
Dependent care FSA $           -   Within annual limit
Transit pass $        120 Exempt up to $260 per month
[(270-260)*12= $120]
Gross income $ 36,770
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