Consider the following 2020 information for Bella and Bill, who file married filing jointly: Scenario I Scenario II Combined salaries of both spouses 164,000 432,100 Purchased stock 5 years ago for 40,000; sold it in 2020 for: Received an inheritance from an aunt who passed away during 2020 Medical expenses paid Mortgage interest paid Charitable contributions paid in cash State taxes withheld Local property taxes paid 31,800 did not sell 99,000 99,000 14,100 14,100 8,800 12,100 770 6,000 5,000 34,568 4,100 14,000 89,000 Federal taxes withheld 17,000 Minor dependent children Two Two a. What is AGI, taxable income and the tax owed? b. What would the tax owed be if the Affordable Care Act (Obamacare) was not in effect?

Consider the following 2020 information for Bella and Bill, who file married filing jointly: Scenario I Scenario II Combined salaries of both spouses 164,000 432,100 Purchased stock 5 years ago for 40,000; sold it in 2020 for: Received an inheritance from an aunt who passed away during 2020 Medical expenses paid Mortgage interest paid Charitable contributions paid in cash State taxes withheld Local property taxes paid 31,800 did not sell 99,000 99,000 14,100 14,100 8,800 12,100 770 6,000 5,000 34,568 4,100 14,000 89,000 Federal taxes withheld 17,000 Minor dependent children Two Two a. What is AGI, taxable income and the tax owed? b. What would the tax owed be if the Affordable Care Act (Obamacare) was not in effect?

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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The Tax Formula for Individuals, A Brief Overview of Capital Gains and Losses (LO 1.3, 1.9) In 2020, Manon earns wages of $54,000. She also has dividend income of $2,800. Manon is single and has no dependents. During the year, Manon sold silver coins held as an investment for a $7,000 loss. Table for the standard deduction Filing Status Standard Deduction Single $12,400 Married, filing jointly 24,800 Married, filing separately 12,400 Head of household 18,650 Qualifying widow(er) 24,800 Calculate the following amounts for Manon: a. Adjusted gross income $fill in the blank b. Standard deduction $fill in the blank c. Taxable income $fill in the blank
Lane is single and has two dependent children. Financial records show the following items in the current year: Gift from a friend Dividends received on stock $12,000 $1,200 $1,000 $35,000 $6,000 $12,000 Price won in state lottery Salary from employer Child support received from ex-spouse Alimony received from ex-spouse How much is Lane's adjusted gross income for the current year? a. $47,000. b. $48,200. c. $49,200. d. $67,200.
Interview Notes Barbara is age 57 and was widowed in 2021. She owns her own home and providedall the cost of keeping up her home for the entire year. Her only income for 2021 was$36,000 in W-2 wages. Jenny, age 24, and her daughter Marie, age 3, moved in with her mother, Barbara,after she separated from her spouse in April of 2021. Jenny’s only income for 2021was $15,000 in wages. Jenny provided over half of her own support. Marie did notprovide more than half of her own support. Jenny will not file a joint return with her spouse. She did not receive advance childtax credit payments for 2021. All individuals in the household are U.S. citizens with valid Social Security numbers.No one has a disability. They lived in the United States all year but not in a communityproperty state. 10. Which of the following statements is true? A. Jenny is eligible to claim Marie for the EIC even though her filing status is married filing separate…
b. Assume that David and Ruby get married in 2023 and file a joint return. What is their taxable income and income tax? Round your final answer to the nearest whole dollar. Gross income and AGI Standard deduction (married, filing jointly) Taxable income Income tax Married 766 Filing Jointly 75,400 27,700 47,700 5,260 c. How much income tax can David and Ruby save if they get married in 2023 and file a joint return?
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John, age 40, is single and has the following income and expenses for 2020: Salary $170,000 Net rental income $7,200 Dividend income (qualified) $4,000 Interest from TD bank $65 Interest from City of Phila bonds $1,200 Loss on sale of section 1244 stock purchased directly from the Corporation $40,000. Alimony payment (divorce finalized December 30, 2018) $12,000. Loss on personal auto as a result of an auto accident $2,500 Contribution to traditional IRA $5,000 Charitable contributions $750 Mortgage interest on personal residence $12,000 Real estate taxes $4,500 State income taxes $5,219 Parking ticket (occurred during work related meeting) $100. Medical expenses (not reimbursed) $4.980. Calculate John’s AGI, taxable income and tax liability for 2020.
QUESTION 51) Kathy and Annise are a married couple who file jointly. In the current year, they have net ordinary income of $10,000 from a partnership interest in which they do not materially participate. They also have a net loss of $30,000 from a rent house in which they actively participate. Their adjusted gross income (AGI) exclusive of these investments is $120,000. What is their AGI after taking into account these investments? $105,000 $125,000 $120,000 $100,000
Tyrone and Akira, who are married, incurred and paid the following amounts of interest during 2020: Home acquisition debt interest: $15,000Credit card interest: $5,000Home equity loan interest (used for home improvement): $6,500Investment interest expense: $10,000Mortgage insurance premiums (PMI): $1,000 With 2020 net investment income of $2,000, calculate the amount of their allowable deduction for investment interest expense and their total deduction for allowable interest. Home acquisition principal and the home equity loan principal combined are less than $750,000.
Harold and Kumar own a tax preparation business that they value at 1,000,000 based on their latest official valuation which includes $ 500,000 of real property. They are purchasing life insurance to fund their buy /sell agreement as neither one wants to work with the other one's spouse. The amount of life insurance that they should purchase on each other is? A. $250,000 each B. $500,000 each $1,000,000 each D. None
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For calendar year 2020, Jon and Betty Hansen (ages 49 and 50) file a joint return reflecting total income (NOT AGI) of $130,000 before the following potential deductions. They incur the following expenditures: Medical expenses net of reimbursements $12,000 Personal casualty loss (not covered by insurance) before $100 and AGI floors, Federally declared disaster area 10,000 Interest on home mortgage, balance of mortgage < $750,000 8,000 Interest on credit cards 1,000 Student loan interest 2,600 Property taxes on home 6,000 State income tax 5,000 State sales tax 3,000 Charitable contributions 14,000 Gambling losses incurred (gambling winnings reported $5,000) 5,500 Betty’s contribution to her Health Savings Account 1,500 Roth IRA contribution 4,000 a. Show the calculation of AGI starting with the total income shown above of $130,000. List and label each deduction FOR AGI that you are using to compute…