Question

Jack and Jill file a joint return for 2019 reflecting salaries of $110,000. They incur the...

Jack and Jill file a joint return for 2019 reflecting salaries of $110,000. They incur the following expenditures and income:

Medical expenses of $9,000, Medical Insurance premiums $7,000, Drug Rehab Program $1,000, Swimming lessons $300

Interest on Margin account $6,000, Mortgage Home Interest $10,000, Credit Card Interest $800,

State Income Tax $7,000, Property taxes, $9,000, Sales Tax $1,000.

Charitable contribution $6,000, Political contribution $100, Gambling losses $500, Casualty loss $3,000

Qualified Business income $20,000, Net Investment income $4,000

A. What is their AGI?

B. What is their Itemized Deductions?

C. What is their taxable Income?

Homework Answers

Answer #1

A.

Salary 110000
Qualified Business Income 20000
Net Investment Income 4000
AGI 134000

B.

Particulars Amount Itemized Deduction
Medical Expenses 9000
Medical Insurance Premium 7000
Drug Rehab Program. 1000
(-)7.5% of AGI (134000*7.5%) -10050 6950
Interest on Margin Account 6000 6000
Interest on Home Mortgage 10000 10000
Property Taxes on Home 9000
State Income Tax 7000 7000
Sales Tax 1000 1000
Charitable Contribution: (limited upto 50% of AGI) 6000 6000
Casualty Loss 3000
(-) Less:- -100
(-) Less:- (10% * 134000) 13400 0
Total 36950

C.

AGI 134000
Itemized Deduction -36950
Standard Deduction -24400
Greater of standard or itemized deduction -36950
Taxable Income 97050
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