Coby has $61,000 of salary and $11,300 of itemized deductions. Chelsea has $87,000 of salary and $15,200 of itemized deductions. They are married and under age 65. Read the requirements2. Requirement a. Compute their taxable incomes if they file separately andChelsea claims itemized deductions on her return. First, compute the taxable income for Coby. (1) (2) Taxable income Now compute the taxable income forChelsea. (3) (4) Taxable income Requirement b. Compute their taxable income if they file jointly. Assume their total itemized deductions equals the sum of their separate itemized deductions. (5) (6) Taxable income 1: ReferenceSTANDARD DEDUCTIONFiling StatusMarried individuals filing joint returns and surviving spouses$24,400Heads of households$18,350Unmarried individuals (other than surviving spouses and heads of households)$12,200Married individuals filing separate returns$12,200Additional standard deduction for the aged and the blind; Individual who is married and surviving spouses$1,300*Additional standard deduction for the aged and the blind; Individual who is unmarried and not a surviving spouse$1,650*Taxpayer claimed as dependent on another taxpayer’s return: Greater of (1) earned income plus $350 or (2) $1,100. * These amounts are $2,600 and $3,300, respectively, for a taxpayer who is both aged and blind.2: Requirementsa.Compute their taxable incomes if they file separately andChelsea claims itemized deductions on her return.b.Compute their taxable income if they file jointly. Assume their total itemized deductions equals the sum of their separate itemized deductions.(Assume 2019 for the current year.)

Itemized Deductions : As the name suggests, it is the deduction of some item expenses incurred…

Answered: Coby has $61,000 of salary and $11,300…

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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Coby has $61,000 of salary and $11,300 of itemized deductions. Chelsea has $87,000 of salary and $15,200 of itemized deductions. They are married and under age 65.

Read the requirements2.

Requirement a. Compute their taxable incomes if they file separately and

Chelsea claims itemized deductions on her return.

First, compute the taxable income for Coby.

(1)
(2)
Taxable income

Now compute the taxable income for

Chelsea.

(3)
(4)
Taxable income

Requirement b. Compute their taxable income if they file jointly. Assume their total itemized deductions equals the sum of their separate itemized deductions.

(5)
(6)
Taxable income

1: Reference

STANDARD DEDUCTION

Filing Status
Married individuals filing joint returns and surviving spouses	$24,400
Heads of households	$18,350
Unmarried individuals (other than surviving spouses and heads of households)	$12,200
Married individuals filing separate returns	$12,200
Additional standard deduction for the aged and the blind; Individual who is married and surviving spouses	$1,300*
Additional standard deduction for the aged and the blind; Individual who is unmarried and not a surviving spouse	$1,650*
Taxpayer claimed as dependent on another taxpayer’s return: Greater of (1) earned income plus $350 or (2) $1,100.
* These amounts are $2,600 and $3,300, respectively, for a taxpayer who is both aged and blind.

2: Requirements

a.	Compute their taxable incomes if they file separately and Chelsea claims itemized deductions on her return.
b.	Compute their taxable income if they file jointly. Assume their total itemized deductions equals the sum of their separate itemized deductions.

(Assume 2019 for the current year.)

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