Question

ANSWER THE FOLLOWING FOR EACH QUESTIONS: A) Determine the AGI this year for the taxpayer(s). B)...

ANSWER THE FOLLOWING FOR EACH QUESTIONS:

A) Determine the AGI this year for the taxpayer(s).

B) Determine the amount of itemized deductions the taxpayer(s) has (have) available this year.

C) Using the 2018 standard deduction amounts (assuming no additional amounts for age or blindness) from Appendix D in of your book, state whether the taxpayer(s) itemize or take the standard deduction. I am not asking for you to state the amount of either the standard deduction or the itemized deductions chosen.

D) Use the individual tax formula and a flat 20% tax rate on all types of taxable income to determine the amount of taxes due or refund amount. Remember to clearly marking the answer as either the amount of tax due or a refund due (e.g. refunds are negative amounts as represented with parentheses or a negative sign, alternatively you can just write “refund” next to it). Assume AMT does not apply, and there are no tax credits available.

4. Rebecca and Thomas are married and file jointly for the 2018 tax year. They are both advertising consultants for the same company. They earned $85,000 in salaries in total and the company forgave a $20,000 loan they made to the couple earlier in the tax year. They were solvent at the time the loan was forgiven. Their firms withheld $20,000 of tax from their salaries this year in total. In addition to the above, the following occurred during the year:

• They paid $15,000 in mortgage interest and $3,000 in real estate taxes for their primary residence.

• Rebecca paid $6,000 on college tuition this year.

• They sold their SUV for $1,500 less than its adjusted tax basis. They had owned it for 7 years. They are not high income taxpayers.

Homework Answers

Answer #1

Calculation Of AGI = $85,000 (Salary) + $20,000 (Cancellation of Debt) = $105,000. Thus, Total AGI = $105,000.

we are considering standard deduction of $24,000, since the itemized deductions are less than standard deduction.

Itemized deduction = $15,000 (mortgage interest) + $3,000 (real estate taxes) = $18,000.

Taxable Income = AGI - Standard Deduction = 105,000 - 24,000 = 81,000

Tax @ 20% = 81,000*20% = $16,200

Taxes withheld = $20,000

Refund = $16,200 - $20,000 = $3,800

Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Chen, a single taxpayer, had the following income and deductions during 2018: Salary                            &n
Chen, a single taxpayer, had the following income and deductions during 2018: Salary                                                 $55,000 Interest on bank account                           750 Tax-exempt interest                                  500 Deduction for AGI                                5,500 Itemized deductions                           15,000 Taxes withheld                                      5,500 Calculate Chen's tax liability due or refund. $1,010.50 tax liability. $1,010.50 refund. $705.50 tax liability. D)     $705.50 refund.
Louis files as a single taxpayer. In April of this year he received a $1,200 refund...
Louis files as a single taxpayer. In April of this year he received a $1,200 refund of state income taxes that he paid last year. How much of the refund, if any, must Louis include in gross income under the following independent scenarios? Assume the standard deduction last year was $12,000. a. Last year Louis claimed itemized deductions of $12,095. Louis’s itemized deductions included state income taxes paid of $2,075 and no other state or local taxes. b. Last year...
Louis files as a single taxpayer. In April of this year he received a $900 refund...
Louis files as a single taxpayer. In April of this year he received a $900 refund of state income taxes that he paid last year. How much of the refund, if any, must Louis include in gross income under the following independent scenarios? Assume the standard deduction last year was $12,000. (Leave no answer blank. Enter zero if applicable.) a. Last year Louis claimed itemized deductions of $12,250. Louis’s itemized deductions included state income taxes paid of $1,750 and no...
1/ Linda, who files as a single taxpayer, had AGI of $280,000 for 2018. She incurred...
1/ Linda, who files as a single taxpayer, had AGI of $280,000 for 2018. She incurred the following expenses and losses during the year: Medical expenses (before the 7.5%-of-AGI limitation) $33,000 State and local income taxes 4,800 State sales tax 1,300 Real estate taxes 6,000 Home mortgage interest 5,000 Automobile loan interest 750 Credit card interest 1,000 Charitable contributions 7,000 Casualty loss (before 10% limitation but after $100 floor; not in a Federally declared disaster area) 34,000 Unreimbursed employee business...
1. Chen, a single taxpayer, had the following income and deductions during 2018: Salary                           &nbsp
1. Chen, a single taxpayer, had the following income and deductions during 2018: Salary                                                 $55,000 Interest on bank account                           750 Tax-exempt interest                                  500 Deduction for AGI                                5,500 Itemized deductions                           15,000 Taxes withheld                                      5,500 Calculate Chen's tax liability due or refund. 2. Artimisa's employer pays $8,000 in tuition this year for Artimisa to attend a graduate business program. How much of the employer-provided tuition is taxable to Artimisa? A) $0 B) $2,750 C) $5,250 D) $8,000
1) The Inouyes filed jointly in 2018. Their AGI is $78,000. They reported $2,000 of qualified...
1) The Inouyes filed jointly in 2018. Their AGI is $78,000. They reported $2,000 of qualified business income and $22,000 of itemized deductions. They have two children, one of whom qualifies as their dependent as a qualifying child. The 2018 standard deduction amount for MFJ taxpayers is $24,000. What is the total amount of from AGI deductions they are allowed to claim on their 2018 tax return? Learning Objective: 04-01 Describe the formula for calculating an individual taxpayer's taxes payable...
Linda, who files as a single taxpayer, had AGI of $280,000 for 2018. She incurred the...
Linda, who files as a single taxpayer, had AGI of $280,000 for 2018. She incurred the following expenses and losses during the year: Medical expenses (before the 7.5%-of-AGI limitation) $33,000 State and local income taxes 4,800 State sales tax 1,300 Real estate taxes 6,000 Home mortgage interest 5,000 Automobile loan interest 750 Credit card interest 1,000 Charitable contributions 7,000 Casualty loss (before 10% limitation but after $100 floor; not in a Federally declared disaster area) 34,000 Unreimbursed employee business expenses...
Petunia's (filing status: single and she is her only dependent) tax calculations are as follows assuming...
Petunia's (filing status: single and she is her only dependent) tax calculations are as follows assuming a 2018 tax year). 2018 standard deduction amount is $6,500 and the exemption amount for 2018 is $4150. Petunia is single and will claim herself as an exemption. She has a house mortgage interest amount of $4,300, property taxes of $3,900, and made $4,950 in charitable contributions during the year. All these are itemized deductions. Calculate her (progressive) income tax liability:             Wages, salaries,...
Linda, who files as a single taxpayer, had AGI of $280,000 for 2018. She incurred the...
Linda, who files as a single taxpayer, had AGI of $280,000 for 2018. She incurred the following expenses and losses during the year: Medical expenses (before the 7.5%-of-AGI limitation) $33,000 State and local income taxes 4,800 State sales tax 1,300 Real estate taxes 6,000 Home mortgage interest 5,000 Automobile loan interest 750 Credit card interest 1,000 Charitable contributions 7,000 Casualty loss (before 10% limitation but after $100 floor; not in a Federally declared disaster area) 34,000 Unreimbursed employee business expenses...
Pedro, who is a single taxpayer, had AGI of $361,200 for 2017. He incurred the following...
Pedro, who is a single taxpayer, had AGI of $361,200 for 2017. He incurred the following expenses during the year: Medical expenses before 10%-of-AGI limitation $21,980 State and local income taxes $10,836 Real estate taxes $2,167 Home mortgage interest $18,060 Charitable contributions $4,334 Deductible investment interest expense $1,625 Compute the amount of Pedro's itemized deductions after any applicable reductions and/or limitations. Round your computations to the nearest dollar and use rounded amounts in subsequent calculations. $