Tax problems 1 Jeremy earned $290,000 in salary and $6,000 in interest income during the year Jeremy

Tax problems

1
Jeremy earned $290,000 in salary and $6,000 in
interest income during the year Jeremy has two qualifying dependent children
who live with him He qualifies to file as head of household and has $22,000 in
itemized deductions Neither of his dependents qualifies for the child tax
credit (use themheducationcom/extMedia/bne/accounting/spilker_7e/tax_rate_schedulejpg”>tax rate
schedules)(Do not round intermediate calculations Round
“Income tax liability” to 2 decimal places)

A) Use
the 2015 tax rate schedules to determine Jeremy’s taxes due

1
Gross Income

2
For AGI Deductions

3
Adjusted gross income

4
Standard deduction

5
Itemized Deductions

6
Greater or Lesser of standard
deductions or Itemized deductions

7
Personal and Dependency
exemptions

8
Taxable income

9
Income tax liability

B)
Assume that in addition to the original facts, Jeremy has a
long-term capital gain of $14,000 What is Jeremy’s tax liability including
the tax on the capital gain?

1 Gross Income

2 For AGI Deductions

3 Adjusted gross income

4 Standard deduction

5 Itemized Deductions

6 Greater or Lesser of standard deductions or Itemized deductions

7 Personal and Dependency exemptions

8 Taxable income

9 Income tax liability

C) Assume the
original facts except that Jeremy had only $7,000 in itemized deductions What
is Jeremy’s total income tax liability?

1 Gross Income

2 For AGI Deductions

3 Adjusted gross income

4 Standard deduction

5 Itemized Deductions

6 Greater or Lesser of standard deductions or Itemized deductions

7 Personal and Dependency exemptions

8 Taxable income

9 Income tax liability

2
David and Lilly Fernandez have
determined their tax liability on their joint tax return to be $1990 They have made prepayments of $700 and also
have a child tax credit of $2000

What is the amount of
their tax refund or taxes due?

1)
Total Tax

2)
Child tax credit or Prepayments

3)
Child tax credit or Prepayments

3
Rick, who is single, has been offered a position
as a city landscape consultant The position pays $50,000 in cash wages Assume
Rick files single and is entitled to one personal exemption Rick deducts the
standard deduction instead of itemized deductions (use themheducationcom/extMedia/bne/accounting/spilker_7e/tax_rate_schedulejpg”>tax rate
schedules)(Do not round intermediate calculations Round
“Income tax liability” and “After-tax compensation” to 2
decimal places Enter deductions as negative amounts)

A)
What is the amount of Rick’s
after-tax compensation (Ignore payroll taxes)?

1 Gross Income

2 For AGI Deductions

3 Adjusted gross income

4 Standard deduction

5 Personal and Dependency exemptions

6 Taxable income

7 Income tax liability

8 After-tax compensation

4
Jasper and Crewella Dahvill were married in year
0 They filed joint tax returns in years 1 and 2 In year 3, their relationship
was strained and Jasper insisted on filing a separate tax return In year 4,
the couple divorced Both Jasper and Crewella filed single tax returns in year
4 In year 5, the IRS audited the couple’s joint year 2 tax return and
each spouse’s separate year 3 tax returns The IRS determined that the
year 2 joint return and Crewella’s separate year 3 tax return understated
Crewella’s self-employment income causing the joint return year 2 tax liability
to be understated by $8,000 and Crewella’s year 3 separate return tax liability
to be understated by $6,500 The IRS also assessed penalties and interest
on both of these tax returns Try as it might, the IRS has not been able to
locate Crewella, but they have been able to find Jasper(Leave no cells blank
– be certain to enter “0” wherever required)

A) What amount of tax can the
IRS require Jasper to pay for the Dahvill’s year 2 joint return?

Amount of
Tax

B) What amount of tax can the
IRS require Jasper to pay for Crewell’s year 3 separate tax return?

Amount of
Tax

5
George and Weezy received $29,300 of Social Security benefits
this year ($11,100 for George; $18,200 for Weezy) They also received
$4,850 of interest from jointly owned City of Ranburne Bonds and dividend
income

What amount of the
Social Security benefits must George and Weezy include in their gross income
under the following independent situations?(Leave no answer blank Enter zero if
applicable)

A)
George and Weezy fille married joint and receive $8850 of
dividend income from stock owned by George?
What is the amount to be included as taxable income?

B)
George and Weezy file married separate and receive $8850 of
dividend income from stock owned by George?
What amount to be included George and Weezy?

C)
George and Weezy file married joint and receive $32400 of
dividend income from stocks owned by
George? What amount to be included as taxable income?

6 For each of the
following situations, indicate how much the taxpayer is required to include
in gross income:(Leave no answer blank Enter zero if applicable)

a

Steve was awarded a $9,350 scholarship to attend State Law
School The scholarship pays Steve’s tuition and fees

b

Hal was awarded a $22,700 scholarship to attend State Hotel
School All scholarship students must work 40 hours per week at the School
residency during the term

a

How much of scholarship is Steve required to include in his
gross income?

What amount to be included?

b

What is the amount of scholarship Hal should include in his
gross income?

What amount to be included?

7
Dontae’s employer has offered him the following employment
package

Salary

$ 405,000

Health
insurance

14,000

Dental
insurance

975

Membership
to Heflin Country Club

16,400

Season
tickets to Atlanta Braves games

4,700

Tuition
reimbursement for graduate courses

3,950

Housing
allowance (for a McMansion in his
neighborhood of choice)

35,500


What is Dontae’s gross
income from his employment?

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