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 AGI. b. Show the calculation of the amount of itemized deductions the Hansen’s may claim. Be sure to label each! c. Show the calculation of the Hansen’s taxable income for 2020
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 AGI.
b. Show the calculation of the amount of itemized deductions the Hansen’s may claim. Be sure to label each!
c. Show the calculation of the Hansen’s taxable income for 2020.
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