Mrs. Cora Yank (age 42) is divorced and has full custody of her 10 year-old son, William.
Question:
Mrs. Cora Yank (age 42) is divorced and has full custody of her 10 year-old son, William. From the following information, compute Mrs. Yank's 2018 federal income tax (including any AMT) and the amount due with her Form 1040 or the refund she should receive.
- Mrs. Yank works as a medical technician in a Chicago hospital. Her salary was $38,400, from which her employer withheld $1,045 federal income tax and $2,938 employee FICA tax.
- Several years ago, Mrs. Yank was seriously injured in a traffic accident caused by another driver's negligence. This year, she received a $25,000 settlement from the driver's insurance company: $20,000 as compensation for her physical injuries and $5,000 for lost wages during her convalescent period. Because she was unable to work for the first seven weeks of the year, she collected $1,400 unemployment compensation from the state of Illinois.
- Mrs. Yank earned $629 interest on a savings account. She contributed $800 to a regular IRA. She is not an active participant in any other qualified retirement plan.
- Mrs. Yank paid $10,800 rent on the apartment in which she and William live. She received $1,600 alimony and $2,350 child support from her former husband under a divorce agreement executed in 2013.
- Mrs. Yank is covered under her employer's medical reimbursement plan. However, this year's medical bills exceeded her reimbursement limit by $1,630.
- Mrs. Yank paid $1,062 income tax to Illinois.
- Mrs. Yank spent $470 on hospital shoes and uniforms. Her employer didn't reimburse her for this expense.
- Mrs. Yank paid $1,300 for after-school child care for William.
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Related Book For
Principles Of Taxation For Business And Investment Planning 2019 Edition
ISBN: 9781260161472
22nd Edition
Authors: Sally Jones, Shelley C. Rhoades Catanach, Sandra R Callaghan
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