Ashley begins a very successful graphic design company on January 10, 2021. She decides not to incorporate and remains a sole proprietor, earning $80,000 in net business income. In the past she has never had business income, and is wondering if this will change, when she has to file her taxes. Her net tax owing in 2019 was $4,100 and in 2020 was $3,200. She expects her net owing in 2021 to be around $3,500 Required: Explain to Ashley if she will have to pay instalments? Explair to her whether instaliments are required, and if applicable, why 1 A- B 1 Provide your answer here:

Ashley begins a very successful graphic design company on January 10, 2021. She decides not to incorporate and remains a sole proprietor, earning $80,000 in net business income. In the past she has never had business income, and is wondering if this will change, when she has to file her taxes. Her net tax owing in 2019 was $4,100 and in 2020 was $3,200. She expects her net owing in 2021 to be around $3,500 Required: Explain to Ashley if she will have to pay instalments? Explair to her whether instaliments are required, and if applicable, why 1 A- B 1 Provide your answer here:

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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Elsie had an AGI of $105,000 in 2018. All of her income was from wages. Elsie owned a rental house and actively participated in the management of the rental house. The rental house generated losses of $25,000 in 2018. Elsie has over $100,000 at risk. What amount of the $25,000 loss can Elsie deduct in 2018?
Harry and Carrie Franklin are married and choose to file Married Filing Jointly on their 2020 tax return. Harry and Carrie have one son Billy and a newborn baby Cristina born in 2020. Carrie was a kindergarten teacher at a private school through May and decided not to return after the birth of her child. Carrie worked a total of 800 hours in 2020 (January - May). She spent $375 on unreimbursed classroom expenses while she was employed. In order to work, the Franklins paid child care expenses of $1,500 through May for Billy. They also paid $750 in child care expenses for Cristina while Carrie volunteered in Billy’s class in November. How much are Harry and Carrie able to deduct for educator expenses in any?
Donald, a wealthy banker, has a 24-year-old son, Junior, that has struggled to keep a job. In 2018, Junior generated wage income of $17,000. Junior is not a dependent of Donald and Junior’s 2018 tax liability is $500. Donald is considering gifting Junior some funds if he agrees to contribute the gift to an IRA in 2018. What is the maximum amount Donald can give that will not exceed Junior’s maximum Saver’s Credit in 2018? $_______________________
Linda and Richard are married and file a joint return for 2021. During the year, Linda, who works as an accountant for a national airline, used $2,100 worth of free passes for travel on the airline; Richard used the same amount. Linda and Richard also used $850 worth of employee discount coupons for hotel rooms at the hotel chain that is also owned by the airline. Richard is employed at State University as an accounting clerk. Under a tuition reduction plan, Richard saved $4,000 in tuition fees during 2021. He is studying for a master's degree in business at night while still working full-time. Richard also had $30 worth of personal typing done by his administrative assistant at the University. What is the amount of fringe benefits that should be included in Linda and Richard's gross income on their 2021 tax return?
In 2020, Amanda and Jaxon Stuart have a daughter who is 1 year old. The Stuarts are full-time students and they are both 23 years old. Their only sources of income are gains from stock they held for three years before selling and wages from part-time jobs.What is their earned income credit in the following alternative scenarios if they file jointly? Use Exhibit 8-10. (Leave no answer blank. Enter zero if applicable.) a. Their AGI is $15,000, consisting of $5,000 of capital gains and $10,000 of wages.
In 2020, Amanda and Jaxon Stuart have a daughter who is 1 year old. The Stuarts are full-time students and they are both 23 years old. Their only sources of income are gains from stock they held for three years before selling and wages from part-time jobs.What is their earned income credit in the following alternative scenarios if they file jointly? Use Exhibit 8-10(https://ezto-cf-media.mheducation.com/Media/Connect_Production/bne/accounting/spilker_12e/exhibit_8_10_new.htm). a. Their AGI is $15,000, consisting of $5,000 of capital gains and $10,000 of wages. Q: what is earned income credit?
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Michael is a self-employed certified public accountant and began his business in 2021. During 2021, he purchased a $1,000 computer and a $400 desk chair. He also paid $7,000 in legal/incorporation fees and spent $14,000 for a new HVAC system for the office building he owns. Which purchase(s) can he expense in 2021 without limitation, if he has the appropriate accounting procedures in place, prior to the beginning of the tax year? (a) Computer and desk only. (b) Computer, desk, legal/incorporation fees only. (c) Computer, desk, legal/incorporation fees, HVAC. (d) Legal/incorporation fees, HVAC only.
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Gino is a computer programmer who earned $ 45,000 in 2019. But on January 1, 2020 he opened a landscaping business. At the end of 2020, Gino submitted the information listed below to his accountant. Use the question facts to calculate Gino's opportunity cost of production and economic profit. Gino stopped renting out his cottage for $ 3,500 a year and used it as his business premises. 1. The market value of the cottage increased from$ 92,000 to$ 98,000 2. 3. He spent $ 30,000 on materials, phone, utilities, etc 4. He leased machines for $ 15,000 a year. 5. He paid $ 15,000 in wages. 6. He used $ 5,000 from his savings account, which earns 5 percent a year interest. 7. He borrowed $ 20,000 at 10 percent a year from the bank. 8. He sold $ 240,000 worth of landscaping. 9. Normal profit is $25,000a year.