What is Ann's home office deduction?
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Ann is a self-employed restaurant critic who does her work exclusively from a home office. Ann's income is $25,000 before the home office deduction this year. Her office takes up 200 square feet of her 1,000-square-foot apartment. The total expenses for her apartment are $6,000 for rent, $1,000 for utilities, $200 for renter's insurance, and $800 for pest control and other maintenance.
What is Ann's home office deduction?
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- Melissa is a fourth-grade teacher who works 1,500 hours during the tax year. She spend $300 on supplies for her students. Of that amount $275 was for educational software. The other $25 was for supplies for a unit she teaches on reproductive health. What is the qualified expense that she can deduct on her taxes? $300, $0, $275, $25Seiko's current salary is $111,500. Her marginal tax rate is 32 percent, and she fancies European sports cars. She purchases a new auto each year. Seiko is currently a manager for Idaho Office Supply. Her friend, knowing of her interest in sports cars, tells her about a manager position at the local BMW and Porsche dealer. The new position pays only $100,300 per year, but it allows employees to purchase one new car per year at a discount of $18,500. This discount qualifies as a nontaxable fringe benefit. In an effort to keep Seiko as an employee, Idaho Office Supply offers her a $13,500 raise. Answer the following questions about this analysis. Problem 12-41 Part a (Algo) a. What is the annual after-tax cost to Idaho Office Supply if it provides Seiko with the $13,500 increase in salary? (Ignore payroll taxes.) Soon toaron and eak b-1. Financially, which offer is better for Seiko on an after-tax basis? O Car dealer's offer O Current employer's offer O Both offers b-2. By how much is…Rhea Xu is a self-employed professional singer. She resides in a rented apartment and uses one room exclusively as a business office. This room includes 405 of the 2,700 square feet of living space in the apartment. Ms. Xu performs in recording studios and concert halls, but she conducts all of the administrative duties with respect to the business in her home office. This year, Ms. Xu's apartment rent was $60,000. She paid $6,400 to a housekeeping service that cleaned the entire apartment once a week and $3,200 for renter's insurance on the apartment furnishings. Required: a. Compute Ms. Xu's home office deduction assuming that her net profit before the deduction was $420,000. b. Compute Ms. Xu's home office deduction assuming that her net profit before the deduction was $5,200. Complete this question by entering your answers in the tabs below. Required A Required B Compute Ms. Xu's home office deduction assuming that her net profit before the deduction was $420,000. Home office…
- Donald Jefferson and his wife, Maryanne, live in a modest house located in a Los Angeles suburb. Donald has a job at Pittsford Cast Iron that pays him $50,000 annually. In addition, he and Maryanne receive $2,500 interest from bonds that they purchased 10 years ago. To supplement his annual income, Donald bought rental property a few years ago. Every month he collects $3,500 in rent from all of the property he owns. Maryanne manages the rental property, and she is paid $15,000 annually for her work. During 2015, Donald had to have the plumbing fixed in the houses that he rents as well as the house in which he and Maryanne live. The plumbing bill was $1,250 for the rented houses and $550 for the Jeffersons’ personal residence. In 2015, Donald paid $18,000 for mortgage interest and property taxes—$12,650 was for the rental houses, and the remaining $5,350 was for the house occupied by him and his wife. The couple has three children who have graduated from medical school and now are…Cindy, who is self-employed, maintains an office in her home that comprises 10% (340 square feet) of total floor space. Gross income for her business is $54,650, and her residence expenses are as follows: Real property taxes $4,092 Interest on mortgage 6,820 Operating expenses 3,410 Depreciation (based on 10% business use) 8,075 a. What is Cindy's office in the home deduction based on the regular method? b. What is Cindy's office in the home deduction based on the simplified method?Sabin is an artist and maintains an office (his studio) in his home. His office occupies 8% of the total floor space of his residence. Gross income from his business is $24,000. Expenses of the business (other than home office expenses) are $5,000. Sabin incurs the following home office expenses: Real property taxes on residence: $2,400 Interest expense on residence: $4,000 Operating expenses of residence: $2,200 Depreciation on residence (based on 8% business use): $450. A) Assuming Sabin uses the "regular method" to compute the office in the home deduction, his deduction is ? B) Assuming Sabin uses the "simplifed method" to computer the office in the home deduction, his deduction is?
- Florence is employed by Sparkling Drinks Limited and earns a salary of $40,000 per month. Her taxable benefits are: housing accommodation $30,000 per month; company car $65,000 (cost $750,000 six years ago, 60% private use). During the year of assessment 2013 on her building society savings account, Florence earned $1,500 interest gross from which $375 withholding tax was deducted. She also earned $3,000 interest gross on a bank fixed deposit (withholding tax $750). For the period January to December 2013 Florence paid $83,172 by PAYE. Note NIS is 2.5% of total emoluments Income tax threshold is $507,312 Calculate the balance of tax due from Florence to the Inland Revenue Department for the year of assessment 2013Reba Dixon is a fifth-grade school teacher who earned a salary of $38,000 in 2022. She is 45 years old and has been divorced for four years. She receives $1,200 of alimony payments each month from her former husband (divorced in 2016). Reba also rents out a small apartment building. This year Reba received $50,000 of rental payments from tenants and she incurred $19,500 of expenses associated with the rental. Reba and her daughter Heather (20 years old at the end of the year) moved to Georgia in January of this year. Reba provides more than one-half of Heather's support. They had been living in Colorado for the past 15 years, but ever since her divorce, Reba has been wanting to move back to Georgia to be closer to her family. Luckily, last December, a teaching position opened up and Reba and Heather decided to make the move. Reba paid a moving company $2,250 to move their personal belongings, and she and Heather spent two days driving the 1,600 miles to Georgia. Reba rented a home in…Bruce and Amanda are married during the tax year. Bruce is a botanist at Green Corporation. Bruce earns a salary of $56,000 per year. Green Corporation has an accountable reimbursement plan. During the year, Bruce has $5,000 of employee expenses. Green Corporation reimburses Bruce for only $4,000 of expenses.Bruce decides to put $5,500 into a Traditional IRA. Amanda owns a financial consulting firm as a sole proprietor (it qualifies as a full trade or business). Amanda generates $80,000 of revenues during the year. She has the following business payments associated with her firm:● Utilities: $2,000● Office Rent: $14,000● Self-Employment Tax: $5,000● Salary for her secretary: $20,000● Fines/Penalties: $8,000● Payroll Taxes (Employer Portion): $1,000● Business Meals: $2,000● Bribe to police officer to forgive parking violation $1,500Due to the income and expenses above, Amanda has $39,500 of Qualified Business Income. Also, during the year a tornado damaged the roof of their personal…
- Seiko's current salary is $106,000. Her marginal tax rate is 32 percent, and she fancies European sports cars. She purchases a new auto each year. Seiko is currently a manager for Idaho Office Supply. Her friend, knowing of her interest in sports cars, tells her about a manager position at the local BMW and Porsche dealer. The new position pays $91,100 per year, but it allows employees to purchase one new car per year at a discount of $24,900. This discount qualifies as a nontaxable fringe benefit. In an effort to keep Seiko as an employee, Idaho Office Supply offers her a $15,900 raise. Answer the following questions about this analysis. b-1. Financially, which offer is better for Seiko on an after-tax basis? b-2. By how much is the offer better for Seiko on an after tax basis? (Assume that Seiko is going to purchase the new car whether she switches jobs or not.)Jinhee Ju, 27, just received a promotion at work that increased her annual salary to $40,000. She is eligible to participate in her employer's 401(k) plan, to which the employer matches dollar-for-dollar workers' contributions up to five percent of salary. However, Jinhee wants to buy a new $25,000 car in 4 years, and she wants to save enough money to make a $8,000 down payment on the car and finance the balance. Also in her plans is a wedding. Jinhee and her boyfriend, Paul, have set a wedding date 2 years in the future, after he finishes medical school. Paul will have $95,000 of student loans to repay after graduation. But both Jinhee and Paul want to buy a home of their own as soon as possible. This might be possible because at age 30, Jinhee will be eligible to access a $55,000 trust fund left to her as an inheritance by her late grandfather. Her trust fund is invested in 8 percent government bonds. a. Justify Jinhee's participation in her employer's 401(k) plan using the time…Reba Dixon is a fifth-grade school teacher who earned a salary of $38,000 in 2021. She is 45 years old and has been divorced for four years. She receives $1,200 of alimony payments each month from her former husband (divorced in 2016). Reba also rents out a small apartment building. This year Reba received $50,000 of rental payments from tenants and she incurred $19,500 of expenses associated with the rental.Reba and her daughter Heather (20 years old at the end of the year) moved to Georgia in January of this year. Reba provides more than one-half of Heather’s support. They had been living in Colorado for the past 15 years, but ever since her divorce, Reba has been wanting to move back to Georgia to be closer to her family. Luckily, last December, a teaching position opened up and Reba and Heather decided to make the move. Reba paid a moving company $2,270 to move their personal belongings, and she and Heather spent two days driving the 1,620 miles to Georgia.Reba rented a home in…
