For the following scenarios, compute the maximum total deductible contribution to a traditional IRA for 2023.Traditional IRAContribution6,000 Xa. Juan, age 41, earns a salary of $58,000 and is not an active participant in any otherqualified plan. His wife, Agnes, generates no earned income.b. Abby, age 29, reports earned income of $45,000, and her husband, Sam, reportsearned income of $4,600. They are not active participants in any other qualified plan.c. Leo's employer makes a contribution of $3,500 to Leo's simplified employee pensionplan. Leo is single, he reports earned income of $70,000, and his AGI is $55,000.10,600 x6,000 X

For the tax year 2023, individuals under the age of 50 can contribute up to $6,500 to a Traditional…

Answered: a. Juan, age 41, earns a salary of…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Susan, a single taxpayer, owns and operates a bakery (as a sole proprietorship). The business is not a specified services business. In 2021, the business pays $60,000 in W-2 wages, has $150,000 of qualified property, and $200,000 in net income (all of which is qualified business income). Susan also has a part-time job earning wages of $13,600, receives $3,400 of interest income, and will take the standard deduction. What is Susan’s qualified business income deduction?
Cami (age 52 and married) was recently laid off as part of her employer’s reduction in workforce program. Cami’s annual AGI was usually around $50,000. Shortly after Cami’s employment was terminated, her employer distributed the balance of her employer-sponsored 401 (k) account to her. What could Cami do to avoid being assessed the 10 percent early distribution penalty?
Ken is a self-employed architect in a small firm with four employees: himself, his office assistant, and two drafters, all of whom have worked for Ken full-time for the last four years. The office assistant earns $33,600 per year and each drafter earns $43,600. Ken's net earnings from self-employment (after deducting all expenses and one-half of self-employment taxes) are $353,600. Ken is considering whether to establish a SEP plan and has a few questions. Assume that all the employees are at least 21 years old d. If the employees are not covered, what is the maximum amount Ken can contribute for himself? A.Lesser of $61,000 or 25% of employee earnings b.Greater of $61,000 or 25% of employee earnings C.Only 25% of employee earnings d.Only $61,000 e. If Ken is required to contribute for his employees and chooses to contribute the maximum amount, what is the maximum amount Ken can contribute for himself? (Hint: Calculate the employee amounts first.) Ignore any changes in Ken's…
Carol Wheeler, age 56, is single. Carol earned wages of $48,000 and was enrolled the entire year in a high deductiblehealth plan (HDHP) with self-only coverage. During the year, Carol contributed $3,000 to her Health Savings Account (HSA) and hercousin also contributed $1,000 to Carol’s HSA account. Carol’s Form W-2 shows $600 in Box 12 with code W. She has Form 5498-SA showing$4,600 in Box 2. Carol took a distribution from her HSA to pay her unreimbursed expenses: 2 visits to a physical therapist due to a car accident $300 unreimbursed doctor bills for $700 prescription medicine $400 replacement of a crown $1,500 over the counter sinus medication $80 10 Zumba classes for $125 Carol is a U.S. citizen with a valid Social Security number. 6. Carol can claim $__________ as her HSA contribution on Form 8889, Part 1.
c. Scott, age 49, is a surviving spouse. His household includes two unmarried stepsons who qualify as his dependents. He has AGI of $75,000 and itemized deductions of $10,100. AGI Less: Standard deduction Taxable income AGI Less: Standard deduction d. Amelia, age 33, is an abandoned spouse who maintains a household for her three dependent children. She has AGI of $58,000 and itemized deductions of $10,650. Taxable income $75,000 AGI Less: Standard deduction 24,000 X Taxable income 50,600 X $58,000 26,850 X e. Chang, age 42, is divorced but maintains the home in which he and his daughter, Jill, live. Jill is single and qualifies as Chang's dependent. Chang has AGI of $64,000 and itemized deductions of $9,900. 31,150 X $64,000
27. Clem is married and is a skilled carpenter. Clem's wife, Wanda, works part time as a substitute grade school teacher. Determine the amount of Clem's expenses that are deductible for AGI this year (if any) under the following independent circumstances: a) Clem is self-employed, and this year he incurred $525 in expenses for tools and supplies related to his job. Because neither was covered by a qualified health plan, Clem paid health insurance premiums of $3,600 to provide coverage for himself and Wanda (not through an exchange). b) Clem and Wanda own a garage downtown that they rent to a local business for storage. This year they incurred expenses of $1,250 in utilities and $780 in depreciation. Page 6-37 c) Clem paid self-employment tax of $15,300 (the employer portion is $7,650), and Wanda had $3,000 of Social Security taxes withheld from her pay. d) Clem paid $45 to rent a safety deposit box to store his coin collection. Clem has collected coins intermittently since he was a…
Simon Millstone is 48 years of age and has employment income of $81,000. His employer withheld the maximum Ei premium and CPP contribution. His wite, Candice, is 46 years old and has Net Income for Tax Purposes of $7,325, They have one child, Daisy, who is 11 years of age and has Income of $3,100. During the year, the family had eligible medical expenses of $2,050 for Simon, $1,950 for Candice and $500 for Daisy. Requirements: 1. Calculate Simon Millstone's minimum federal Tax Payable for 2020. Show your answer in good form with appropriate description of amounts. 2. Indicate any carry forward amount(s) available to him and his dependents and the carry forward provisions. For the toolbar, press ALTF10 (PC) or ALT+FN+F10 (Mac). B. Paragraph Arial 14px
Jun, a minimum wage earner, works for a foundation. He is not engaged inbusiness nor has any other source of income other than his employment. In 2018,Jun earned a total compensation income of P135,000. He contributed to the SSS,Philhealth, and HDMF amounting to P5,000 and has received 13th month pay ofP11,000. In 2019, Jun earned, aside from his basic wage, additional pay ofP140,000 which consists of the overtime pay of P80,000, night shift differentialof P30,000, hazard oay of P15,000 and holiday pay of P15,000. He contributedto the SSS, Philhealth, and HDMF amounting to P5,000 and has received 13thmonth pay of P11,000. What is his income tax liability in 2019? a. 2,600b. 1,800c. 0d. 2,200
Ekiya, who is single, has been offered a position as a city landscape consultant. The position pays $150,200 in wages. Assume Ekiya has no dependents. Ekiya deducts the standard deduction instead of itemized deductions, and she is not eligible for the qualified business income deduction. What is the amount of Ekiya's after-tax compensation (ignore payroll taxes)? Solve for sub-questions 2, 4, and 6.
Andrew, who is single, retired from his job this year. He received a salary of $26,000 for the portion of the year that he worked, tax-exempt interest of $2,600, and dividends from domestic corporations of $3,700. On October 1, he began receiving monthly pension payments of $700 and Social Security payments of $500. Assume an exclusion ratio of 40% for the pension. Andrew owns a duplex that he rents to others. He received rent of $11,000 and incurred $16,000 of expenses related to the duplex. He continued to actively manage the property after he retired from his job. Requirement Compute Andrew's adjusted gross income. Salary Dividend income 26,000 3,700 Rental income 11,000 Social security income (taxable portion) ? Pension income (taxable portion) Gross income Minus: Deductions for Adjusted gross income Rental income Adjusted gross income -16,000
Bonnie is 49 and single. She receives salary income of $35,000, unemployment compensation of $5,400, dividend income of $1,000 and a gift of $7,000 in cash from her aunt. How much is Bonnie's taxable income (Form 1040, Line 15)? Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.
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