Meg and James Rashev were both employed full-time during the year. The Rashevs have four children: Joanne (age 17), Susie (age 14), and Sarah and Kelly (4-year-old twins). The Rashevs employed a nanny to look after their children and paid her $15,000 for the year. In addition, during July, Susie went to overnight camp for two weeks at a cost of $250 per week. The Rashevs' family income is summarized below: Meg James Salary & taxable benefits Employment expenses [sec. 8] Business income: Revenue Expenses Interest income $46,000 (2,800) $50,000 (32,000) 1,500 What is the maximum child care deduction that can be claimed by the Rashevs in the year and who can claim it? 800

Meg and James Rashev were both employed full-time during the year. The Rashevs have four children: Joanne (age 17), Susie (age 14), and Sarah and Kelly (4-year-old twins). The Rashevs employed a nanny to look after their children and paid her $15,000 for the year. In addition, during July, Susie went to overnight camp for two weeks at a cost of $250 per week. The Rashevs' family income is summarized below: Meg James Salary & taxable benefits Employment expenses [sec. 8] Business income: Revenue Expenses Interest income $46,000 (2,800) $50,000 (32,000) 1,500 What is the maximum child care deduction that can be claimed by the Rashevs in the year and who can claim it? 800

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

Bobby is 35 and single. He works for ExxonMobil in their offices in Dallas, Texas. Bobby has an Aetna PPO with a $2,500 individual deductible, co-insurance in network is 80/20. His Max out of pocket is $10,500 per year. On the way to a meeting at the office, Bobby trip and fell down the stairs. He suffered significant injuries and had to be airlifted to the hospital, He was in a coma for 3 days and had to have multiple surgeries. Fortunately, he has fully recovered. All-in-all his medical bills added up to $82,345 How much of Bobby's medical expenses will Aetna cover? (Use a positive number and round to the nearest dollar)
Carey and Pat were good friends and neighbors in an upscale neighborhood near several highly rated golf courses in Arizona. During the winter, both Carey and Pat decided to rent their homes (at a premium) to groups of golfers from the New York area who wanted to get out of the snow and enjoy sunshine and golf for a couple of weeks during the winter. While their homes were rented, Carey and Pat vacationed together in Cancun. In January 2020, Carey rented his home for 14 days and received $14,000 in rent. Pat also rented his home for the same 14 days and received $16,000 in rent. Near the end of the 14-day rental period, Pat got a call from the renters, who wanted to extend their stay for one day. Pat agreed to the extension and charged the group $2,000 for the extra day. When preparing his 2020 tax return, Pat discovered that taxpayers who rent their home for more than 14 days are required to report all of their rental income on their tax returns. Pat didn’t think it was fair that he…
Aramis and Danielle Bisset, both in their mid-20s, have been married for 4 years and have two preschool-age children. Aramis has an accounting degree and is employed as a cost accountant at an annual salary of $64,000. They're now renting a duplex but wish to buy a home in the suburbs of their rapidly developing city. They've decided they can afford a $425,000 house and hope to find one with the features they desire in a good neighborhood. The insurance costs on such a home are expected to be $1,000 per year, taxes are expected to be $3,000 per year, and annual utility bills are estimated at $1,800 - an increase of $500 over those they pay in the duplex. The Bissets are considering financing their home with a fixed-rate, 30-year, 6 percent mortgage. The lender charges 2 points on mortgages with 20 percent down and 3 points if less than 20 percent is put down (the commercial bank that the Bissets will deal with requires a minimum of 10 percent down). Other closing costs are estimated at…
Charlotte (age 40) is a surviving spouse and provides all of the support of her four minor children (ages 4, 8, 11, and 14) who live with her. She also maintains the household in which her parents live and furnished 60% of their support. Besides interest on City of Miami bonds in the amount of $5,500, Charlotte's father received $2,400 from a part-time job. Charlotte has a salary of $80,000, a short-term capital loss of $2,000, a cash prize of $4,000 from a church raffle, and itemized deductions of $10,500. Click here to access the standard deduction table to use, if required. If an amount is zero, enter "$0". a. Compute Charlotte's taxable income. $fill in the blank: 56,900 (correct) b. Using the Tax Rate Schedules (click here), tax liability (before any allowable credits) for Charlotte is $fill in the blank: 6,430 for 2021. (correct) c. Compute Charlotte's child and dependent tax credit. Charlotte's child tax credit is $fill in the blank: 12,600 (Incorrect) , of which $fill in the…
Charlotte (age 40) is a surviving spouse and provides all of the support of her four minor children, who live with her. Charlotte also maintains the household in which her parents live, and she furnished 60% of their support. Besides interest on City of Miami bonds in the amount of $5,500, Charlotte’s father received $2,400 from a part-time job. Charlotte earns an $80,000 salary, a short-term capital loss of $2,000, and a cash prize of $4,000 at a church raffle. Charlotte reports itemized deductions of $10,500. Use tax figures for 2022.a. Compute Charlotte's taxable income.b. Using the Tax Rate Schedules , tax liability for Charlotte is $ for 2022.c. Compute Charlotte's child and dependent tax credit.
Sophie Lopez is a 72-year-old widow who has recently been diagnosed with Alzheimer’s disease. She has limited financial assets of her own and has been living with her daughter Felicity for two years. Her income is $850a month in Social Security survivor’s benefits. Felicity wants to make surethat her mother will be taken care of if Felicity should die prematurely. Felicity, 40, is single and earns $55,000 a year as a human resources manager for a small manufacturing firm. She owns a condo with a current market value of $100,000 and has a $70,000 mortgage. Other debtsinclude a $5,000 auto loan and $500 in various credit card balances. Her 401(k) plan has a current balance of $24,500, and she keeps $7,500 in a money market account for emergencies. After talking with her mother’s doctor, Felicity believes that her mother will be able to continue living independently for another two to three years. She estimates that her mother would need about $2,000 a month to cover her living…
Charlene, a chemist, worked in a chemistry lab and earned $60,000 per year. Charlene quit in order to start her own business. To buy the necessary equipment, she withdrew $50,000 from her savings, (which paid two percent interest per year) and borrowed $60,000 from her Aunt Bea, whom she pays five percent interest per year. Last year she paid $48,000 for ingredients and paid all of the interest on the loan from her aunt. She had revenue of $124,000. For last year, Alvin, the accountant, says Charlene’s profit is ________ and Emily the economist, says Charlene’s profit is ________. $76,000; $12,000 $73,000; $14,000 $73,000; $12,000. $73,000; $13,000. $72,000; $13,000.
Sandra earns $21,000 in employment income in 2020 and her spouse Susan earns$18,000. They have two children: Mike, who is 5 years old, and Eric, who is 9 yearsold. They spent $2,500 on after school care from 3:30 - 5:30 each day, since theywork until 5:30, and they also sent Eric to a 2-week biking training camp for $1,000where he stayed overnight in cabins.Calculate the maximum child care expense deduction the family can take.
Mary Jane’s father lived with them until his death in November. His only sources of income were salary of $3,800, unemployment compensation benefits of $3,500, and Social Security benefits of $4,100. Of this amount, he deposited $6,000 in a savings account. The remainder of his support of $11,000, which included funeral expenses of $4,500, was provided by John and Mary Jane. Is Mary Jane's father considered a dependant?
Carol Wheeler, age 56, is single. Carol earned wages of $48,000 and was enrolled the entire year in a high deductiblehealth plan (HDHP) with self-only coverage. During the year, Carol contributed $3,000 to her Health Savings Account (HSA) and hercousin also contributed $1,000 to Carol’s HSA account. Carol’s Form W-2 shows $600 in Box 12 with code W. She has Form 5498-SA showing$4,600 in Box 2. Carol took a distribution from her HSA to pay her unreimbursed expenses: 2 visits to a physical therapist due to a car accident $300 unreimbursed doctor bills for $700 prescription medicine $400 replacement of a crown $1,500 over the counter sinus medication $80 10 Zumba classes for $125 Carol is a U.S. citizen with a valid Social Security number. 8. The over the counter sinus medication is a qualified medical expense for HSApurposes. True False
Bradley has two college-age children, Clint, a freshman (his first year in college) at State University, and Abigail, a junior at Northwest University (her third year of college). Both Clint and Abigail are full-time students. Bradley is in graduate school. Clint’s expenses for the year are as follows: $3,200 tuition and $500 books and course materials. Abigail’s expenses for the year are as follows: $7,200 tuition, $1,200 books and course materials, and $4,500 room and board. Bradley paid $5,000 of tuition for graduate school and $600 for books. Bradley is married, files a joint tax return, claims both children as dependents, and has a combined AGI with his wife of $139,000 for 2020. Bradley has determined that the available education credits are more beneficial than the available deductions. Determine the following: A. Clint: Which credit should he take? Total eligible expenses: Show calculation of maximum credit allowed: B. Abigail: Which credit should she take?…
Reba Dixon is a fifth-grade school teacher who earned a salary of $38,000 in 2021. She is 45 years old and has been divorced for four years. She receives $1,200 of alimony payments each month from her former husband (divorced in 2016). Reba also rents out a small apartment building. This year Reba received $50,000 of rental payments from tenants and she incurred $19,500 of expenses associated with the rental.Reba and her daughter Heather (20 years old at the end of the year) moved to Georgia in January of this year. Reba provides more than one-half of Heather’s support. They had been living in Colorado for the past 15 years, but ever since her divorce, Reba has been wanting to move back to Georgia to be closer to her family. Luckily, last December, a teaching position opened up and Reba and Heather decided to make the move. Reba paid a moving company $2,210 to move their personal belongings, and she and Heather spent two days driving the 1,560 miles to Georgia.Reba rented a home in…