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What is Kathy's Taxable Income?

What is Kathy's Taxable Income?

FINANCIAL ACCOUNTING
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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ASSIGNMENT #1 Question #1 Kathy Smith, age 42 and single, is a pilot for United Airlines. For 2022, her W-2 reported $125,000 in salary, $15,700 federal income tax withheld, $6,500 state income tax withheld and the appropriate amount of Social Security and Medicare withheld. Kathy rents an apartment for $3,000 per month in Santa Monica pear LAX. United Airlines pays $2,000 per year to provide Kathy with Group Term Life Insurance for coverage equal to one year of Kathy's salary. She received a $20,000 gift from her grandfather to help her save for a down payment to purchase a home. When she flies early morning flights, she is provided with free breakfast at the United Airlines lounge, which would have cost her a total of $900 for the year. She is able to fly free on United. She took two free flights for vacation in 2022, one to Cancun and one to the Bahamas. The cost of those two flights would have been $300 and $600 respectively. In 2021, she itemized her deductions, which totaled $13,150. Kathy's additional transactions for 2022 include: Interest earned on bond issued by Intel Corporation Charitable donation to her church Medical expenses Car insurance State Tax refund for 2021 received in April 2022 Utilities on apartment What is Kathy's Taxable Income? 3,000 2,000 1,000 1,600 1,500 2,500
Transcribed Image Text:ASSIGNMENT #1 Question #1 Kathy Smith, age 42 and single, is a pilot for United Airlines. For 2022, her W-2 reported $125,000 in salary, $15,700 federal income tax withheld, $6,500 state income tax withheld and the appropriate amount of Social Security and Medicare withheld. Kathy rents an apartment for $3,000 per month in Santa Monica pear LAX. United Airlines pays $2,000 per year to provide Kathy with Group Term Life Insurance for coverage equal to one year of Kathy's salary. She received a $20,000 gift from her grandfather to help her save for a down payment to purchase a home. When she flies early morning flights, she is provided with free breakfast at the United Airlines lounge, which would have cost her a total of $900 for the year. She is able to fly free on United. She took two free flights for vacation in 2022, one to Cancun and one to the Bahamas. The cost of those two flights would have been $300 and $600 respectively. In 2021, she itemized her deductions, which totaled $13,150. Kathy's additional transactions for 2022 include: Interest earned on bond issued by Intel Corporation Charitable donation to her church Medical expenses Car insurance State Tax refund for 2021 received in April 2022 Utilities on apartment What is Kathy's Taxable Income? 3,000 2,000 1,000 1,600 1,500 2,500
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