Jason and Mary are married taxpayers in 2015. They are both under age 65 and in good health. For this tax year, they have a total of $41,000 in wages and $500 in inter- est income. Jason and Mary’s deductions for adjusted gross income amount to $5,000 and their itemized deductions equal $7,950. They claim two exemptions for the year on their joint tax return.
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a. What is the amount of Jason and Mary’s adjusted gross income? 36,500 (41000+500-5000)
b. What is the amount of their itemized deductions or standard deduction? 12,200
c. What is their 2015 taxable income? 16,500 (36500-12200-2@3900)
Problem 3 (page 1-34)
Leslie is a single taxpayer who is under age 65 and in good health. For 2015, she has a salary of $24,000 and itemized deductions of $1,000. Leslie is entitled to one ex- emption on her tax return.
a. How much is Leslie’s adjusted gross income? $ 24,000
b. What amount of itemized or standard deduction(s) should she claim? 6,100
c. What is the amount of Leslie’s taxable income? 14,000 (24000-6100-3900)
Problem 4 (page 1-34)
In 2015, Lou has a salary of $53,000 from her job. She also has interest income of $1,700 and dividend income of $400. Lou is single and has no dependents. During the year, Lou sold silver coins held as an investment for a $7,000 loss. Calculate the following amounts for Lou:
a. Adjusted gross income 51,500 (53000+1700-3000)
b. Standard deduction 6100
c. Exemption 3900
d. Taxable income 41700 (51500-6100-3900)
Problem 6 (page 1-35)
Diego, age 28, married Dolores, age 27, in 2015. Their salaries for the year amounted to $47,126 and they had interest income of $3,500. Diego and Dolores’ deductions for adjusted gross income amounted to $2,000, their itemized deductions were $11,576, and they claimed two exemptions on their return.
a. What is the amount of their adjusted gross income? $
b. What is the amount of their itemized deductions or standard deduction? $
c. What is the amount of their taxable income?
d. What is their tax liability for 2015? $ $
Problem 10: Download the TAX 2000 Wk 1 Problem 10 Instructions for further information
Jim (age 50) and Martha (age 49) are married with three dependent children. They file a joint return for 2015. Their income from salaries totals $49,500, and they received $10,125 in taxable interest, $5,000 in royalties, and $3,000 in other ordinary income. Jim and Martha’s deductions for adjusted gross income amount to $3,200, and they have itemized deductions totalling $13,200. Calculate the following amounts:
a. Gross income
b. Adjusted gross income
c. Itemized deduction or standard deduction amount
d. Number of exemptions e. Taxable income
Answer the following questions in Group 2 Problems:
Problem 1 (page 2-32)
1. Indicate whether each of the items listed below would be included (I) in or excluded (E) from gross income for the 2015 tax year.
a. Welfare payments
c. Hobby income
d. Scholarships for room and board
e. $300 set of golf clubs, an employee award for length of service
f. Severance pay
g. Ordinary dividend of $50
h. Accident insurance proceeds received for personal bodily injury
k. Tips and gratuities
Problem 2 (page 2-32)
2. John installed a new roof on his friend’s house in return for a used truck worth $6,000. How much income must John report on his tax return for his services?
Problem 3 (page 2-32)
3. Larry is a tax accountant and Sheila is a hairdresser. Larry prepares Sheila’s tax return for free and Sheila agrees to style Larry’s hair six times for free in return for the tax return. The value of the tax return is approximately $300 and the hair styling work is approximately $300.
a. How much of the $300 is includable income to Larry? Why?
b. How much of the $300 is includable income to Sheila? Why?
Problem 11 (page 2-36)
11. How much of each of the following is taxable?
a. Cheline received a $50,000 gift bag from the Oscars during 2015.
b. Jon received a gold watch worth $750 for 25 years of service to his accounting firm (not a qualified award).
c. Kerry won $1,000,000 in her state lottery.
d. Deborah is a professor who received $50,000 as an award for her scientific research from the university that employs her
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