Question

• Phil, 35 years old is an accountant. He receives medical insurance and fringe benefits from the employee. His wife, Sharon is 33 years old and works part time as office manager. They have 1 child, Amy 4 years old (qualifies for the $2,000 child care credit. They live in NYC and Sharon’s mother cares for Amy at no cost.  

Phil’s Gross salary	$56,400
Sharon’s salary	$22,000
Cash gift	$5,000
Interest Income from bank acc	$100
Federal income tax w/h	$2,500
State income tax	$3,680
Charitable contributions	$6,000
Rent paid	$10,000
Made a loan on March 1 in current year to a friend, who was starting a business. Principal amount was $10,000 and interest is due on December 31 annually. Interest rate is 5%.	Calculate amount	(Loan was done as part of arm’s length transaction and interest was paid on time)
Purchased 100 shares of IBM for $2,000 in April of this year and sold the stock for December for $1,500	Calculate amount
Municipal Bond Interest	$500
Purchased 100 shares of Disney for $5,000 and sold it for $1,000. Held the stock for 2 years	Calculate amount

Calculate Phil and Sharon's taxable income?

Answer 1

Answer :

Taxable income calculaiton - Married couples together

Gross income

Income from salary 56400 + 22000 = 78400

Standard deduction (16050) 62350

Capital gain

Short term capital loss 500 (can't set off against any other heads)

Long term capital gain 4000 (can't set off against any other heads)

Income from other source

Interest income from bank 100

cash gift 5000

Inrerest from loan 417

Municipal bond interest 500

Total income after standard deductions 68367

Less : Personal exemption

Municipal interest bond 500

Charitable contribution 6000 (6500)

Taxable income 61867

answered by: anonymous