Trevor is a single individual who is a cash-method, calendar-year taxpayer. For each of the next two years (2023 and 2024), Trevor expects to report salary of $80,000, contribute $8,000 to charity, and pay $2,800 in state Income taxes. Required: a. Estimate Trevor's taxable income for 2023 and 2024 using the 2023 amounts for the standard deduction for both years. b. Now assume that Trevor combines his anticipated charitable contributions for the next two years and makes the combined contribution in December of 2023. Estimate Trevor's taxable income for each of the next two years using the 2023 amounts for the standard deduction. c. Trevor plans to purchase a residence next year, and he estimates that additional property taxes and residential interest will cost $2,000 and $10,000, respectively, each year. Estimate Trevor's taxable income for each of the next two years (2023 and 2024) using the 2023 amounts for the standard deduction and also assuming Trevor makes the charitable contribution of $8,000 and state tax payments of $2,800 in each year. d. Trevor plans to purchase a residence next year, and he estimates that additional property taxes and residential Interest will cost $2,000 and $10,000, respectively, each year. Assume that Trevor makes the charitable contribution for 2024 In December of 2023. Estimate Trevor's taxable income for 2023 and 2024 using the 2023 amounts for the standard deduction. Complete this question by entering your answers in the tabs below. Required A Required B Required C Required D Estimate Trevor's taxable income for 2023 and 2024 using the 2023 amounts for the standard deduction for both years. 2024 Salary Itemized deductions Standard deduction Taxable income Total taxable income for the two years $ 2023 0 $ 0

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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* NOTE: For the tab graphs for a, c, & d, between Standard Deductions and Taxable Income, there is a drop-down menu where you must choose between 4 options: 1) Greater of Itemized Deduction over Standard Deduction, 2) Greater of Standard Deduction over Itemized Deduction, 3) Lesser of Itemized Deduction over Standard Deduction, or 4) Lesser of Standard Deduction over Itemized Deduction. For the tab graph for problem b, it is the same choices (#1,2, 3, or 4), but two drop-down menu places are between Standard Deductions and Itemized Deductions (make 2 choices out of 4) instead of one place, as in a, c, & d (making 1 choice out of the 4, shown above).

Trevor is a single individual who is a cash-method, calendar-year taxpayer. For each of the next two years (2023 and 2024), Trevor expects to report a salary of $80,000, contribute $8,000 to charity, and pay $2,800 in state income taxes.

**Required:**

a. Estimate Trevor’s taxable income for 2023 and 2024 using the 2023 amounts for the standard deduction for both years.

b. Now assume that Trevor combines his anticipated charitable contributions for the next two years and makes the combined contribution in December of 2023. Estimate Trevor’s taxable income for each of the next two years using the 2023 amounts for the standard deduction.

c. Trevor plans to purchase a residence next year, and he estimates that additional property taxes and residential interest will cost $2,000 and $10,000, respectively, each year. Estimate Trevor’s taxable income for each of the next two years (2023 and 2024) using the 2023 amounts for the standard deduction and also assuming Trevor makes the charitable contribution of $8,000 and state tax payments of $2,800 in each year.

d. Trevor plans to purchase a residence next year, and he estimates that additional property taxes and residential interest will cost $2,000 and $10,000, respectively, each year. Assume that Trevor makes the charitable contribution for 2024 in December of 2023. Estimate Trevor’s taxable income for 2023 and 2024 using the 2023 amounts for the standard deduction.

**Table Explanation:**

- The table provides a format to calculate Trevor's taxable income.
- Rows included: Salary, Itemized deductions, Standard deduction, Taxable income.
- Columns for each year (2023 and 2024) are provided for input.
- The bottom row shows the "Total taxable income for the two years," calculated by entering answers in the respective tabs.

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