Review the following scenario. Use the information provided to answer questions about the taxpayers’ 2020 return.Chris (45) and Allison (46) Castillo are married, and they will file a joint return. During the year, they earned $82,500 in wages. They also had investment income consisting of:$200 interest income from a savings account with their local bank, reported on Form 1099-INT.$350 interest income from a certificate of deposit held with another local bank, reported on Form 1099-INT.$250 interest income from a U.S. Treasury note, reported on Form 1099-INT.$500 tax-exempt interest income from a municipal bond investment, reported on Form 1099-INT.$1,700 in ordinary dividends from a mutual fund investment, reported on Form 1099-DIV.They had no other income. Question 1What amount will Chris and Allison report for taxable interest on their Form 1040? The couple's partially completed Form 1040, page 1, is shown below. You may use the form to assist you in answering this question. $550 $800 $1,050 $1,300 Question 2What amount will Chris and Allison report for their total income on Form 1040? You may refer to the couple's partially completed Form 1040, page 1, which is shown below, to assist you in answering this question. $83,050 $85,000 $85,250 $85,500 ### Form 1040 U.S. Individual Income Tax Return (2020)#### General Information- **Filing Status Options:** - Single - Married filing jointly - Married filing separately - Head of household - Qualifying widow(er)- **Personal Details:** - Taxpayer's First Name and Middle Initial: Chris - Last Name: Castillo - Social Security Number: XXX–XX–XXXXX- **Spouse's Details:** - First Name: Allison - Last Name: Castillo - Spouse's Social Security Number: XXX–XX–XXXXX- **Address:** - Street: 801 Hemlock Street - City: Your City - State: YS - ZIP Code: XXXXXX- **Presidential Election Campaign:** Option to contribute $3.- **Currency Interest:** Question on virtual currency transactions.#### Exemptions and Deductions- **Standard Deduction:** Options for claiming dependents and spousal exemptions.- **Age/Blindness Checkboxes:** - For individuals/spouse born before January 2, 1956, or blind.#### Income and Adjustments- **Income Sources:** - **Line 1:** Wages, salaries, tips, etc., totaling $82,500. - **Line 2a:** Tax-exempt interest. - **Line 3a–3b:** Qualified dividends and ordinary dividends. - **Line 4a–4b:** IRA distributions. - **Line 5a–5b:** Pensions and annuities. - **Line 6a–6b:** Social Security benefits. - **Line 7:** Capital gain or loss.- **Adjusted Gross Income:** - **Line 8:** Other income. - **Line 9:** Total income from lines 2b, 3b, 4b, etc. - **Line 10:** Adjustments to income. - **Net Income:** - **Line 11:** Adjusted gross income. - **Line 12:** Standard deduction amount. - **Line 13:** Subtract line 12 from line 11 to get total for line 13, $24,800.#### Note on Diagrams/Graphs- No diagrams or graphs are present on this

Incomes that is included for tax interest: Wages =$82,500 Savings account=$200(exempted) Certificate of deposit=$350(Taxable) Treasury note=$250(Taxable) Tax exempt interest=$500(exempted) Dividends from mutual funds=$1,700(exempted) Wages = $82,500- 5/100= Total taxable income :$78,375+$350+$250=$78,975thank u plzzz vote it

Answered: Review the following scenario. Use the…

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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Question 1

What amount will Chris and Allison report for taxable interest on their Form 1040? The couple's partially completed Form 1040, page 1, is shown below. You may use the form to assist you in answering this question.

$550
$800
$1,050
$1,300

Question 2

What amount will Chris and Allison report for their total income on Form 1040? You may refer to the couple's partially completed Form 1040, page 1, which is shown below, to assist you in answering this question.

$83,050
$85,000
$85,250
$85,500

### Form 1040 U.S. Individual Income Tax Return (2020)

#### General Information
- **Filing Status Options:**
- Single
- Married filing jointly
- Married filing separately
- Head of household
- Qualifying widow(er)

- **Personal Details:**
- Taxpayer's First Name and Middle Initial: Chris
- Last Name: Castillo
- Social Security Number: XXX–XX–XXXXX

- **Spouse's Details:**
- First Name: Allison
- Last Name: Castillo
- Spouse's Social Security Number: XXX–XX–XXXXX

- **Address:**
- Street: 801 Hemlock Street
- City: Your City
- State: YS
- ZIP Code: XXXXXX

- **Presidential Election Campaign:** Option to contribute $3.

- **Currency Interest:** Question on virtual currency transactions.

#### Exemptions and Deductions
- **Standard Deduction:** Options for claiming dependents and spousal exemptions.
- **Age/Blindness Checkboxes:**
- For individuals/spouse born before January 2, 1956, or blind.

#### Income and Adjustments
- **Income Sources:**
- **Line 1:** Wages, salaries, tips, etc., totaling $82,500.
- **Line 2a:** Tax-exempt interest.
- **Line 3a–3b:** Qualified dividends and ordinary dividends.
- **Line 4a–4b:** IRA distributions.
- **Line 5a–5b:** Pensions and annuities.
- **Line 6a–6b:** Social Security benefits.
- **Line 7:** Capital gain or loss.

- **Adjusted Gross Income:**
- **Line 8:** Other income.
- **Line 9:** Total income from lines 2b, 3b, 4b, etc.
- **Line 10:** Adjustments to income.

- **Net Income:**
- **Line 11:** Adjusted gross income.
- **Line 12:** Standard deduction amount.
- **Line 13:** Subtract line 12 from line 11 to get total for line 13, $24,800.

#### Note on Diagrams/Graphs
- No diagrams or graphs are present on this

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