PLEASE HELP ME UNDERSTAND AND USE THE INFORMATION PROVIDED WITH THE FOLLOWING THANK YOU! IT WILL NOT MAKE SENSE TO ME IF INFORMATION IS USED FROM A DIFFERENT QUESTION. Lillian and Jackson Clark are married in their early 20s living in Los Angeles. Jackson Clark earned $93,000 in 2018 from his sales job. During the year, his employer withheld $11,685 for income tax purposes. In addition, the Clarks received interest of $350 on a joint savings account, $750 interest on tax-exempt municipal bonds, and dividends of $400 on common stocks. At the end of 2018, the Clarks sold two stocks, A and B. Stock A was sold for $700 and purchased four months earlier for $800. Stock B was sold for $1,500 and bought 3 years earlier for $1,100. Although his company's pension plan covers Jackson, he plans to contribute $5,500 to a traditional deductible IRA for 2018. In addition, their only child, Carter, age 2, received (as his sole source of income) dividends of $200 from Hershey's stock. PLEASE EXPLAIN THOROUGHLY FOR A BETTER UNDERSTANDING Using the Clarks' information, determine the total amount of their itemized deductions. The Clarks are married, filing jointly, and have the standard deduction of $24,000. Should they itemize or take the standard deduction? The Clarks saved how much by using standard vs. itemized deduction? Compose a schedule computing the tax on a married joint return for Jackson and Lillian Clark for the year ended December 31, 2018, giving them the smallest tax liability.

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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PLEASE HELP ME UNDERSTAND AND USE THE INFORMATION PROVIDED WITH THE FOLLOWING THANK YOU! IT WILL NOT MAKE SENSE TO ME IF INFORMATION IS USED FROM A DIFFERENT QUESTION.

Lillian and Jackson Clark are married in their early 20s living in Los Angeles. Jackson Clark earned $93,000 in 2018 from his sales job. During the year, his employer withheld $11,685 for income tax purposes.

In addition, the Clarks received interest of $350 on a joint savings account, $750 interest on tax-exempt municipal bonds, and dividends of $400 on common stocks. At the end of 2018, the Clarks sold two stocks, A and B. Stock A was sold for $700 and purchased four months earlier for $800. Stock B was sold for $1,500 and bought 3 years earlier for $1,100. Although his company's pension plan covers Jackson, he plans to contribute $5,500 to a traditional deductible IRA for 2018. In addition, their only child, Carter, age 2, received (as his sole source of income) dividends of $200 from Hershey's stock.

PLEASE EXPLAIN THOROUGHLY FOR A BETTER UNDERSTANDING

Using the Clarks' information, determine the total amount of their itemized deductions.
The Clarks are married, filing jointly, and have the standard deduction of $24,000. Should they itemize or take the standard deduction?
The Clarks saved how much by using standard vs. itemized deduction?
Compose a schedule computing the tax on a married joint return for Jackson and Lillian Clark for the year ended December 31, 2018, giving them the smallest tax liability.

Expenses	Cost
Medical and Dental expenses (unreimbursed) ------- ARE THESE CONSIDERED ITEMIZED? -------	$200
State and local property taxes	$831
Interest paid on home mortgage	$4,148
Charitable contributions	$1,360
Total	$6,539

In addition, Reimbursed Travel Costs Jackson incurred for an out-of-town business trip:

Expenses	Cost
Airline ticket	$250
Taxis	$20
Lodging	$60
Meals (as adjusted to 50 percent of cost)	$36
Total	$366

## 2018 Individual Tax Rate Schedules

### Single
- **If taxable income is:**
- **Over $0, but not over $9,525:**
Tax: 10% of the amount over $0
- **Over $9,525, but not over $38,700:**
Tax: $952.50 + 12% of the amount over $9,525
- **Over $38,700, but not over $82,500:**
Tax: $4,453.50 + 22% of the amount over $38,700
- **Over $82,500, but not over $157,500:**
Tax: $14,089.50 + 24% of the amount over $82,500
- **Over $157,500, but not over $200,000:**
Tax: $32,089.50 + 32% of the amount over $157,500
- **Over $200,000, but not over $500,000:**
Tax: $45,689.50 + 35% of the amount over $200,000
- **Over $500,000:**
Tax: $150,689.50 + 37% of the amount over $500,000

### Head of Household
- **If taxable income is:**
- **Over $0, but not over $13,600:**
Tax: 10% of the amount over $0
- **Over $13,600, but not over $51,800:**
Tax: $1,360.00 + 12% of the amount over $13,600
- **Over $51,800, but not over $82,500:**
Tax: $5,944.00 + 22% of the amount over $51,800
- **Over $82,500, but not over $157,500:**
Tax: $12,698.00 + 24% of the amount over $82,500
- **Over $157,500, but not over $200,000:**
Tax: $30,698.00 + 32% of the amount over $157,500
- **Over $200,000, but not over $500,000:**

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