Sheila and Joe Wells are married with no dependent children. During 2021, they have gross income of $159,800, deductions for AGI of $5,500, and itemizeddeductions of $10,000. The Wells had $22,000 withheld by their employer for federal income tax. They have a tax(due/refund) of $

The tax refund is computed by deducting the income tax withheld by an employer from the tax…

Answered: Shella and Joe Wells are married with…

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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During the current tax year, Doug incurs the following deductible expenses: State Income Tax $2,300 Local Property Tax $3,000 Medical Expenses $ 800 Charitable Contributions $2,000 Doug is 33, single with no dependents. His has $35,000 AGI for the year. What is the amount of Doug's taxable income.
L. A. and Paula file as married taxpayers. In August of this year, they received a $5,200 refund of state income taxes that they paid last year. How much of the refund, if any, must L. A. and Paula include in gross income under the following independent scenarios? Assume the standard deduction last year was $25,100. Note: Leave no answer blank. Enter zero if applicable. Required: a. Last year L. A. and Paula had itemized deductions of $19,200, and they chose to claim the standard deduction. b. Last year L. A. and Paula claimed itemized deductions of $31,400. Their itemized deductions included state income taxes paid of $7,500 and no other state or local taxes. c. Last year L. A. and Paula claimed itemized deductions of $27,600. Their itemized deductions included state income taxes paid of $10,500, which were limited to $10,000 due to the cap on state and local tax deductions.
Cameron is single and has taxable income of $92,616. Determine his tax liability using the tax tables and using the tax rate schedule. Why is there a difference between the two amounts?
Jeremy (unmarried) earned $101,000 in salary and $6,050 in interest income during the year. Jeremy's employer withheld $10,000 of federal income taxes from Jeremy's paychecks during the year. Jeremy has one qualifying dependent child (age 14) who lives with him. Jeremy qualifies to file as head of household and has $24,060 in itemized deductions. (Use the tax rate schedules, Tax rates for Net Capital Gains and Qualified Dividends.) Required: a. Determine Jeremy's tax refund or taxes due. b. Assume that in addition to the original facts, Jeremy has a long-term capital gain of $4,020. What is Jeremy's tax refund or tax due including the tax on the capital gain? c. Assume the original facts except that Jeremy has only $7,100 in itemized deductions. What is Jeremy's tax refund or tax due?
This year, Paula and Simon (married filing jointly) estimate that their tax liability will be $227,000. Last year, their total tax liability was $188,000. They estimate that their tax withholding from their employers will be $195,700. a. Are Paula and Simon required to increase their withholdings or make estimated tax payments this year to avoid the underpayment penalty? O Yes O No b. By how much, if any, must Paula and Simon increase their withholding and/or estimated tax payments for the year to avoid underpayment penalties? Increase in withholding
Tucker (age 52) and Elizabeth (age 48) are a married couple. Tucker is covered under a qualified retirement plan at his job and earned $90,000 in 20x 4. Elizabeth is employed as a lab technician and earned $30,000 but is not covered under a qualified retirement plan. They file a joint return; have interest and dividend income of $25,000. What is the maximum amount of tax deductible contributions that may be made to a traditional IRA? $12,000 $13,000 50 $6,000
Sharon Jones is single. During 2022, she had gross income of $159,800, deductions for AGI of $5,500, itemized deductions of $14,000 and tax credits of $2,000. Sharon had $22,000 withheld by their employer for federal income tax. She has a tax (due/refund) rounded to the nearest whole dollar of $.
Victor and Lorraine, ages 45 and 47, respectively, are married and are cash basis taxpayers. They had the following tax items for 2021: Salaries of $61,000 Bad debt of $3,000 from uncollected rent Collection of unpaid rent from a prior year of $4,000 Rental income of $60,000 (property is managed by Victor and Lorraine - does not include collection from above) Rental expenses of $53,000 (does not include bad debt above) Personal casualty loss (from one event; a flood after a storm) of $2,000; not in a Federally declared disaster area. There is not enough information to know if they are eligible to deduct the Qualified Business Income credit, so ignore this for now. Other itemized deductions of $21,000. They wish to file as married filing jointly. Calculate the following: 1) Adjusted Gross Income 2) Taxable income
Jen and Cassian earned $650,000 in salaries and $36,000 in interest income during the year. They had a $26,000 loss from a Schedule C and Rental income of $8,500. They had $53,000 in itemized deductions. Their employers withheld $169,000 of federal taxes from Their paychecks and they have no dependents. Use the 2021 tax rate schedules to determine Jen and Cassian’s taxes due or refund. Assume that in addition to the original facts, they have a long-term capital gain of $20,000 and qualifieddividends of $40,000. What is their tax due or refund including the tax on their investment income?
Joyce is a single, cash-method taxpayer. On April 11, 2021, Joyce paid $120 in state income taxes with her 2020 state income tax return. During 2021, Joyce had $1,600 in state income taxes withheld. On April 13, 2022, Joyce paid $200 with her 2021 state tax return. During 2022, she had $2,100 in state income taxes with-held from her paycheck. Upon filing her 2022 tax return on April 15, 2023, she received a refund of $450 for excess state income taxes withheld. Joyce had total AGI in 2022 and 2023 of $51,000 and $53,500, respectively. In 2022, Joyce also paid $13,500 in qualified residence interest. a. What is the amount of state income taxes Joyce may include as an itemized deduction for 2021? b. What is Joyce’s allowed itemized deduction for state income taxes for 2022? c. What is Joyce’s taxable income for 2022?
The Washington’s standard deduction on their 2021 tax return is $________.
In 2020, Fred (55, head of household) has taxable income of $79,120. Fred had federal income taxes of $1,000 and state income taxes of $1,000 withheld from his paychecks in 2020, and he is entitled to a $501 federal tax credit. What is the amount of Fred's 2020 federal income tax liability after credits and prepayments?

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Shella and Joe Wells are married with no dependent children. During 2021, they have gross income of $159,800, deductions for AGI of $5,500, and itemized deductions of $10,000. The Wells had $22,000 withheld by their employer for federal income tax. They have a tax due/refund) of $