a.
Introduction: Income tax law enables individuals to pay taxes to the government for the social and economic benefits of the public and it allows the government to collect and spend revenues in creating value for the society at large. Income tax law applicability is not limited to individuals only but also corporations, firms, trusts, etc.
The gross income.
a.
Answer to Problem 9P
Gross income:
Explanation of Solution
Given information:
Salary income: $49,500
Interest income: $10,125
Royalty income: $5,000
Other income: $3,000
Deductions for adjusted gross income: $3,200 and,
Itemized deductions: $18,600
So, the gross income of J and M will be:
b.
Introduction: Income tax law enables individuals to pay taxes to the government for the social and economic benefits of the public and it allows the government to collect and spend revenues in creating value for the society at large. Income tax law applicability is not limited to individuals only but also corporations, firms, trusts, etc.
The adjusted gross income.
b.
Answer to Problem 9P
Adjusted gross income (AGI):
Explanation of Solution
Given information:
Salary income: $49,500
Interest income: $10,125
Royalty income: $5,000
Other income: $3,000
Deductions for adjusted gross income: $3,200 and,
Itemized deductions: $18,600
So, the gross income of J and M will be:
Now, the calculation of adjusted gross income will be as under:
c.
Introduction: Income tax law enables individuals to pay taxes to the government for the social and economic benefits of the public and it allows the government to collect and spend revenues in creating value for the society at large. Income tax law applicability is not limited to individuals only but also corporations, firms, trusts, etc.
The amount of itemized deduction or the standard deduction.
c.
Answer to Problem 9P
Standard deduction:
Explanation of Solution
Given information:
Salary income: $49,500
Interest income: $10,125
Royalty income: $5,000
Other income: $3,000
Deductions for adjusted gross income: $3,200 and,
Itemized deductions: $18,600
So, the gross income of J and M will be:
Now, the calculation of adjusted gross income will be as under:
Since itemized deductions are $18,200 and the amount of standard deduction is $24,400 available to J and M, so greater amount will be selected. Thus standard deduction of $24,400 will be considered.
d.
Introduction: Income tax law enables individuals to pay taxes to the government for the social and economic benefits of the public and it allows the government to collect and spend revenues in creating value for the society at large. Income tax law applicability is not limited to individuals only but also corporations, firms, trusts, etc.
The taxable income.
d.
Answer to Problem 9P
J’s taxable income:
Explanation of Solution
Given information:
Salary income: $49,500
Interest income: $10,125
Royalty income: $5,000
Other income: $3,000
Deductions for adjusted gross income: $3,200 and,
Itemized deductions: $18,600
So, the gross income of J and M will be:
Now, the calculation of adjusted gross income will be as under:
Since itemized deductions are $18,600 and the amount of standard deduction is $24,400 available to J and M, so greater amount will be selected. Thus standard deduction of $24,400 will be considered to calculate taxable income.
Thus, the calculation of taxable income will be as under:
e.
Introduction: Income tax law enables individuals to pay taxes to the government for the social and economic benefits of the public and it allows the government to collect and spend revenues in creating value for the society at large. Income tax law applicability is not limited to individuals only but also corporations, firms, trusts, etc.
The income tax liability.
e.
Answer to Problem 9P
Tax liability:
Explanation of Solution
Given information:
Salary income: $49,500
Interest income: $10,125
Royalty income: $5,000
Other income: $3,000
Deductions for adjusted gross income: $3,200 and,
Itemized deductions: $18,600
So, the gross income of J and M will be:
Now, the calculation of adjusted gross income will be as under:
Since itemized deductions are $18,600 and the amount of standard deduction is $24,400 available to J and M, so greater amount will be selected. Thus standard deduction of $24,400 will be considered to calculate taxable income.
Thus, the calculation of taxable income will be as under:
Therefore, the tax liability will be computed as under:
Therefore, the tax liability will be
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Chapter 1 Solutions
Income Tax Fundamentals 2020
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Individual Income TaxesAccountingISBN:9780357109731Author:HoffmanPublisher:CENGAGE LEARNING - CONSIGNMENT