as a design engineer for a manufacturing firm, while Jessie runs a craft business from their home. Jessie's ess consists of making craft items for sale at craft shows that are held periodically at various locations. Jess erable time and effort on her craft business, and it has been consistently profitable over the years. Joe an home and pay interest on their home loan (balance of $220,000) and a personal loan to pay for Lizzie's c ses (balance of $35,000). er Joe nor Jessie is blind or over age 65, and they plan to file as married joint. Assume that the employer p If-employment tax on Jessie's income is $831. Joe and Jessie have summarized the income and expenses t to report this year as follows:
as a design engineer for a manufacturing firm, while Jessie runs a craft business from their home. Jessie's ess consists of making craft items for sale at craft shows that are held periodically at various locations. Jess erable time and effort on her craft business, and it has been consistently profitable over the years. Joe an home and pay interest on their home loan (balance of $220,000) and a personal loan to pay for Lizzie's c ses (balance of $35,000). er Joe nor Jessie is blind or over age 65, and they plan to file as married joint. Assume that the employer p If-employment tax on Jessie's income is $831. Joe and Jessie have summarized the income and expenses t to report this year as follows:
Chapter8: Taxation Of Individuals
Section: Chapter Questions
Problem 67TA
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Question
Transcribed Image Text:Joe and Jessie are married and have one dependent child, Lizzie. Lizzie is currently in college at State University. Joe works as a design engineer for a manufacturing firm, while Jessie runs a craft business
from their home. Jessie's craft business consists of making craft items for sale at craft shows that are held periodically at various locations. Jessie spends considerable time and effort on her craft business,
and it has been consistently profitable over the years. Joe and Jessie own a home and pay interest on their home loan (balance of $220,000) and a personal loan to pay for Lizzie's college expenses (
balance of $35,000). Neither Joe nor Jessie is blind or over age 65, and they plan to file as married joint. Assume that the employer portion of the self-employment tax on Jessie's income is $831. Joe
and Jessie have summarized the income and expenses they expect to report this year as follows: Income: Expenditures:. a. Determine Joe and Jessie's AGI and taxable income for the year. Note: Round
your intermediate calculations to the nearest whole dollar amount. Joe and Jessie's AGI Joe and Jessie's Taxable income
Transcribed Image Text:Joe and Jessie are married and have one dependent child, Lizzie. Lizzie is currently in college at State University. Joe
works as a design engineer for a manufacturing firm, while Jessie runs a craft business from their home. Jessie's craft
business consists of making craft items for sale at craft shows that are held periodically at various locations. Jessie spends
considerable time and effort on her craft business, and it has been consistently profitable over the years. Joe and Jessie
own a home and pay interest on their home loan (balance of $220,000) and a personal loan to pay for Lizzie's college
expenses (balance of $35,000).
Neither Joe nor Jessie is blind or over age 65, and they plan to file as married joint. Assume that the employer portion of
the self-employment tax on Jessie's income is $831. Joe and Jessie have summarized the income and expenses they
expect to report this year as follows:
Income:
Joe's salary
Jessie's craft sales
Interest from certificate of deposit
Interest from Treasury bond funds
Interest from municipal bond funds
Expenditures:
Federal income tax withheld from Joe's wages
State income tax withheld from Joe's wages
Social Security tax withheld from Joe's wages
Real estate taxes on residence
Automobile licenses (based on weight)
State sales tax paid
Home mortgage interest
Interest on Masterdebt credit card
Medical expenses (unreimbursed)
Joe's employee expenses (unreimbursed)
Cost of Jessie's craft supplies
Postage for mailing crafts
Travel and lodging for craft shows
Self-employment tax on Jessie's craft income
College tuition paid for Lizzie
Interest on loans to pay Lizzie's tuition
Lizzie's room and board at college
Cash contributions to the Red Cross
$ 144,100
18,400
1,650
716
920
$ 13,700
6,400
7,482
6,200
310
1,150
26,000
2,300
1,690
2,400
4,260
145
2,230
1,662
5,780
3,200
12,620
525
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