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 $659. Joe and Jessie have summarized the income and expenses they expect to report this year as follows: Income: Joe's salary $ 136,300 Jessie's craft sales 18,620 Interest from certificate of deposit 1,870 Interest from Treasury bond funds 760 Interest from municipal bond funds 964 Expenditures: Federal income tax withheld from Joe's wages $ 13,700 State income tax withheld from Joe's wages 6,840 Social Security tax withheld from Joe's wages 7,570 Real estate taxes on residence 6,640 Automobile licenses (based on weight) 354 State sales tax paid 1,370 Home mortgage interest 18,200 Interest on Masterdebt credit card 2,740 Medical expenses (unreimbursed) 1,910 Joe's employee expenses (unreimbursed) 2,840 Cost of Jessie's craft supplies 6,680 Postage for mailing crafts 167 Travel and lodging for craft shows 2,450 Self-employment tax on Jessie's craft income 1,317 College tuition paid for Lizzie 6,220 Interest on loans to pay Lizzie's tuition 3,640 Lizzie's room and board at college 13,060 Cash contributions to the Red Cross 635 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 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 $659. Joe and Jessie have summarized the income and expenses they expect to report this year as follows: Income: Joe's salary $ 136,300 Jessie's craft sales 18,620 Interest from certificate of deposit 1,870 Interest from Treasury bond funds 760 Interest from municipal bond funds 964 Expenditures: Federal income tax withheld from Joe's wages $ 13,700 State income tax withheld from Joe's wages 6,840 Social Security tax withheld from Joe's wages 7,570 Real estate taxes on residence 6,640 Automobile licenses (based on weight) 354 State sales tax paid 1,370 Home mortgage interest 18,200 Interest on Masterdebt credit card 2,740 Medical expenses (unreimbursed) 1,910 Joe's employee expenses (unreimbursed) 2,840 Cost of Jessie's craft supplies 6,680 Postage for mailing crafts 167 Travel and lodging for craft shows 2,450 Self-employment tax on Jessie's craft income 1,317 College tuition paid for Lizzie 6,220 Interest on loans to pay Lizzie's tuition 3,640 Lizzie's room and board at college 13,060 Cash contributions to the Red Cross 635 a. Determine Joe and Jessie's AGI and taxable income for the year. Note: Round your intermediate calculations to the nearest whole dollar amount.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Please Explain Proper Step by Step and Do Not Give Solution In Image Format And Fast Answering Please Thanks In Advance ?
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 $659. Joe and Jessie have
summarized the income and expenses they expect to report this year as follows: Income: Joe's salary $ 136,300 Jessie's
craft sales 18,620 Interest from certificate of deposit 1,870 Interest from Treasury bond funds 760 Interest from municipal
bond funds 964 Expenditures: Federal income tax withheld from Joe's wages $ 13,700 State income tax withheld from
Joe's wages 6,840 Social Security tax withheld from Joe's wages 7,570 Real estate taxes on residence 6,640 Automobile
licenses (based on weight) 354 State sales tax paid 1,370 Home mortgage interest 18,200 Interest on Masterdebt credit
card 2,740 Medical expenses (unreimbursed) 1,910 Joe's employee expenses (unreimbursed) 2,840 Cost of Jessie's craft
supplies 6,680 Postage for mailing crafts 167 Travel and lodging for craft shows 2,450 Self-employment tax on Jessie's
craft income 1,317 College tuition paid for Lizzie 6,220 Interest on loans to pay Lizzie's tuition 3,640 Lizzie's room and
board at college 13,060 Cash contributions to the Red Cross 635 a. Determine Joe and Jessie's AGI and taxable income for
the year. Note: Round your intermediate calculations to the nearest whole dollar amount.
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