Trevor
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
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 $98,000, contribute $8,600 to charity, and pay $3,250 in state income taxes.
- Trevor plans to purchase a residence next year, and he estimates that additional property taxes and residential interest will cost $2,900 and $23,500, 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.
Transcribed Image Text:**Instructions for Estimating Taxable Income**
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 year using the 2023 amounts for the standard deduction.
**Note:** Amounts to be deducted should be indicated with a minus sign.
---
**Table: Taxable Income Estimation**
| | 2023 | 2024 |
|------------------------|------|------|
| Salary | | |
| Itemized deductions | | |
| Standard deduction | | |
| | | |
| **Taxable Income** | $0 | $0 |
| | | |
| **Total taxable income for the two years** | |
- The table includes rows for detailing salary, itemized deductions, and the standard deduction for both 2023 and 2024.
- Enter respective amounts and compute taxable income by subtracting deductions from the salary.
- Note that the initial taxable income for both years is set to $0.
- The final row is for calculating the total taxable income over the two-year period.
Make sure to update the table with the relevant deductions and salary information for an accurate estimation of taxable income.
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