Pfin (with Mindtap, 1 Term Printed Access Card) (mindtap Course List)
7th Edition
ISBN: 9780357033609
Author: Randall Billingsley, Lawrence J. Gitman, Michael D. Joehnk
Publisher: Cengage Learning
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Chapter 3, Problem 6FPE
a.
Summary Introduction
To determine: The tax return of person L for the year 2018.
A taxable income is termed to any person's or business' remuneration that is utilized to decide tax liability. The gross income or total income is utilized as the origin to ascertain the amount of taxes an individual or a business owes to the government for the regular tax period.
a.
Expert Solution
Explanation of Solution
Determine the taxable income:
Form 1040 is used by majority of the taxpayers. Scholarship used to pay Tuition is tax exempted. The itemized deduction are lower than the standard deduction and will not influence the return.
Therefore the taxable income is $45,035.
Determine the tax liability:
Therefore the taxable liability is $5,847.20.
Determine the tax due:
Therefore the taxable due is $3,247.20.
b.
Summary Introduction
To determine: The tax return of person L for the year 2018 with additional information provided.
b.
Expert Solution
Explanation of Solution
Determine the revised adjusted gross income:
Therefore the revised adjusted gross income is $52,185.
Determine the revised taxable income:
Therefore the revised taxable income is $40,185.
Determine the ordinary taxable income:
Therefore the ordinary taxable income is $40,035.
Determine the taxes on ordinary taxable income
Therefore the taxes on ordinary taxable income is $4,747.20.
Determine the tax liability:
Therefore the taxable liability is $4,769.70.
Determine the tax due
Therefore the taxable due is $2,169.70.
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Students have asked these similar questions
Choosing and preparing an individual tax form. Liam McKenzie is single, graduated from college in 2018 and began work as a systems analyst in July of that year. He is preparing to file his income tax return for 2018 and has collected the following financial information for that calendar year. A blank Form 1040 and Schedule 1 may be obtained at www.irs.gov.
Scholarship used to pay Tuition $ 5,750
Scholarship used to pay room, and board 1,850
Salary 55,000
Interest income 185
Itemized Deductions 3,000
Income taxes withheld 2,600
Prepare Liam’s 2018 tax return, using a $12,000 standard deduction and the tax rates given in Exhibit 3.3.
Choosing and preparing an individual tax form. Liam McKenzie is single, graduated from college in 2019 and began work as a systems analyst in July of that year. He is preparing to file his income tax return for 2020 and has collected the following financial information for that calendar year. A blank Form 1040 and Schedule 1 may be obtained at www.irs.gov. or in Blackboard under course materials
Scholarship used to pay Tuition $ 5,650
Scholarship used to pay room, and board 1,750
Salary 47,000
Interest income 285
Itemized Deductions 4,000
Income taxes withheld 2,800
a. Prepare Liam’s 2020 tax return, using the 2020 standard deduction and the tax schedule.
Richard Cook Directions Using the tax software, complete the tax return, including Form 1040 and all appropriate forms, schedules, or worksheets. Answer the questions following the scenario. Note: When entering Social Security numbers (SSNs) or Employer Identification Numbers (EINs), replace the Xs as directed, or with any four digits of your choice. Interview Notes • Richard is age 39 and was widowed in 2017. He has a daughter, Isabella, age 5. • Richard provided the entire cost of maintaining the household and over half of the support for Isabella. In order to work, he pays childcare expenses to Busy Bee Daycare. • Richard declined to receive advance child tax credit payments in 2021. • Richard’s earned income in 2019 was $19,000. • Richard and Isabella are U.S. citizens and lived in the United States all year in 2021. • Richard received the third Economic Impact Payment (EIP3) in the amount of $2,800 in 2021.
33. Richard does not qualify to claim a retirement savings contribution…
Chapter 3 Solutions
Pfin (with Mindtap, 1 Term Printed Access Card) (mindtap Course List)
Ch. 3 - Discuss the basic principles of income taxes and...Ch. 3 - Prob. 2LOCh. 3 - Prob. 3LOCh. 3 - Explain who needs to pay estimated taxes, when to...Ch. 3 - Know where to get help with your taxes and how...Ch. 3 - Implement an effective tax planning strategy.Ch. 3 - Calculating marginal tax rates. Lacey Hansen is...Ch. 3 - Estimating taxable income, tax liability, and...Ch. 3 - Calculating taxes on security transactions. If...Ch. 3 - Prob. 4FPE
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