1 Amelia and Addison are your grandparents Amelia and Addison asked you to help them with their tax return in 2020 Below is a few financial info that they provide you Both Amelia and Addison main source of income is from their rental house In 2020, they earned $48,000 in total from their rental properties In the middle of 2020, Addison had heart attack and must go to the emergency room The total medical cost that Addison paid out of pocket was $5000 Knowing that her dad had a bad accidence, Alice came over to visit and gave the old couple a $10,000 check in September 2020 The couple did not immediately cash in the check but plan to only cash it in January 2021 Amelia told you that she hopes that by doing so, she would not have to recognize the amount in 2020 Amelia and Addison paid $24,000 in total on their Texas property tax in 2020 On their Vegas trip in early 2020, Amelia played Blackjack and won $2000 However, Addison was not that lucky and lost S1000 a) What filing status do you recommend for Amelia and Addison b) What is Amelia and Addison Gross income (Provide detailed explanation on why or why not you include certain items Failing to provide explanation will got point deducted) c) What is Amelia and Addison Adjustments For AGI deduction (Provide detailed explanation on why or why not you include certain items Failing to provide explanation will got point deducted) d) What is Amelia and Addison total Itemized deduction (Provide detailed explanation on why or why not you include certain items Failing to provide explanation will got point deducted) e) What is Amelia and Addison standard deduction Show calculation and explanation if needed f) What is Amelia and Addison total taxable income Filing status Married Jointly NOTES 45,000 ( ) 45,000 24,800 24,800 200 Gross Income Adjustments (Above the Line deductions) Adjusted Gross Income (AGI) From AGI deduction Greater of (a) Standard deduction OR (b) Itemized deduction Deduction for Qual Business Income Taxable income Marginal Tax rate Income tax liability Credit Prepayment Tax due or (Tax refund) 20,200 129 2,029 ( ) 2,029 Fed income tax brackets Tax rate Husband Wific Both wife and husband Tax rate Single Taxable income bracket Tax owed 10 50 to 9 875 10 of taxable income 12 89,876 to $40,125 $987 50 plus 12 of the amount over $9 875 229 540,126 to $85 525 54 617 50 plus 22 of the amount over $40,125 24 585 526 to $163 300 $14 605 50 plus 20 of the amount over $85 525 3295163,301 to $207,350 $33 271 50 plus 32 of the amount over S163,300 35 $207,351 to $$18 400 547 367 50 plus 35 of the amount over $207,350 37 5518,401 or more $156,235 plus 37 of the amount over $518,400 Married filling jointly Taxable income bracket Tax owed 10 50 to $19,750 10 of taxable income 12 $19,751 to $80,250 $1,975 plus 12 of the amount over $19 750 22 580,251 to $171,050 $9 235 plus 22 of the amount over $0,250 24 8171,051 to $326,600 $29 211 plus 24 of the amount over $171,050 32 5326,601 to $414,700 $66 543 plus 32 of the amount over $326,600 35 5414,701 to 5622,050 $94 735 plus 35 of the amount over $414 700 37 $622,051 or more $167 307 50 plus 37 of the amount over $622,050 Married filing Meparately Taxable income bracket Tax owed 10 50 to $9,875 10 of taxable income 12 89 876 to $40,125 $987 50 plus 12 of the amount over $9 875 22 540,126 to 585,525 $4 617 50 plus 22 of the amount over $40 125 24 585 526 to $163,300 $14 605 50 plus 24 of the amount over $85 525 32 S163,301 to $207,350 $33 271 50 plus 32 of the amount over $163 300 35 $207,351 to $311,025 $47 367 50 plus 35 of the amount over $207,350 37 $11 026 or more $83 653 75 plus 37 of the amount over $311,025 Head of household Taxable income bracket Tax owed 10 50 to $14,100 10 of taxable income 12 $14,101 to $53,700 $1,410 plus 12 of the amount over $14,100 22 553,701 to $85,500 56,162 plus 22 of the amount over $53,700 24 585,501 to $163,300 $13,158 plus 24 of the amount over $85,500 32 8163,301 to $207,350 $31 830 plus 32 of the amount over S163,300 35 $207,351 to $$18 400 $45 926 plus 35 of the amount over $207,350 37 $518,401 or more S154 793 50 plus 37 of the amount over $518,400 Tax rate Tax rate 2020 Standard Deduction Filing Status Deduction Amount Single Married Piling Jointly Head of Household $12,4001 524 800 $18,650 2020 Child Tax Credit S2000 child 2020 Tax Rates on Long Term Capital Gains For Unmarried Individuals For Married Individuals Filing Joint Returns For Heads of Household Tax Rate Taxable income Over SO SO $80,000 S496,600 $53,600 $469,050 15 $40 000 20 $441,450 Additional Net Investment Incore Tax 3 80 MAGI above $200,000 MAGI above $250,000 MAGI above $200 000 Husband Wife 30,000 50,000 20 125 amount over $9 875 camount over $40,125 the amount over $85 525 the amount over $16 100 the amount over $207,350 amount over $318 400 3 4025 6 790 Taxif each filing separa 10 1925 Both wife and husband Tax joint marriage 80,000 9 205 amount over $19 750 amount over SN3350 camount over $171,050 e amount over $326,600 e amount over $414,700 of the amount over $622,050 e amount over $9 875 the amount over $40,125 the amount over $85 525 the amount over $163,300 the amount over $207,350 the amount over $311,025 amount over $14 100 amount over $53,700 e amount over $85 500 e amount over $163,300 e amount over $207,350 of the amount over $518,400 bital Gains als Filing Joint Returns For Heads of Households SO $80,000 $496,600 SO $53,600 $469,050 MAGI above $200,000 Fed income tax brackets Single Tax rate Taxable income bracket Tax owed 10 S0 to $9 875 10 of taxable income 129 89,876 to 40,125 5987 50 plus 12 of the amount over $9 875 22 540,126 to $85 525 54,617 50 plus 22 of the amount over $40,125 24 585,526 to $163,300 $14,605 50 plus 24 of the amount over $85,525 32 S163,301 to $207,350 $33,271 50 plus 32 of the amount over $163,300 35 $207,351 to $518,400 S47,367 50 plus 35 of the amount over $207,350 37 $518,401 or more S156,235 plus 37 of the amount over $518,400 Married ning jointly Tax rate Taxable income bracket Tax owed 10 50 to $19,750 10 of taxable income 12 $19,751 to $80,250 $1,975 plus 12 of the amount over $19,750 22 580,251 to $171,050 $9,235 plus 22 of the amount over $80,250 24 8171,051 to $326,600 $29,211 plus 24 of the amount over $171,050 32 8326,601 to $414,700 $66,543 plus 32 of the amount over $326,600 35 414,701 to $622,050 $94 735 plus 35 of the amount over $414,700 37 $622,051 or more S167,307 50 plus 37 of the amount over $622,050 Married filling separately Tax rate Taxable income bracket Tax owed 10 50 to $9 875 10 of taxable income 12 89,876 to S40,125 $987 50 plus 12 of the amount over $9,875 22 540,126 to $85,525 S4,617 50 plus 22 of the amount over $40,125 24 585,526 to $163,300 S14,605 50 plus 24 of the amount over $85,525 32 S163,301 to $207,350 $33,271 50 plus 32 of the amount over $163,300 35 $207,351 to $311,025 $47,367 50 plus 35 of the amount over $207,350 37 $311,026 or more $83,653 75 plus 37 of the amount over $311,025 Head of household Tax rate Taxable income bracket Tax owed 10 50 to $14,100 10 of taxable income 12 S14,101 to $53,700 $1,410 plus 12 of the amount over $14,100 22 553,701 to $85,500 $6,162 plus 22 of the amount over $53,700 24 585,501 to $163,300 $13,158 plus 24 of the amount over $85,500 32 5163,301 to $207,350 $31 830 plus 32 of the amount over $163,300 35 $207,351 to $518,400 $45 926 plus 35 of the amount over $207,350 37 5518,401 or more S154,793 50 plus 37 of the amount over $518,400 Taxable income 20 200 Single Threshold Rate Cummulative tax 0 10 0 9 875 12 9875 40,125 22 4,6175 85,525 14,605 163,300 33 271 5 207,350 35 47,3675 518,400 37 156,235 Married filing jointly Threshold Rate Cummulative tax 0 10 0 19 750 12 1,975 80,250 22 9,235 171 050 24 29,211 326,600 32 66,543 414 700 35 94,735 622,050 37 167,307 5 Married filling separately Threshold Cummulative tax 0 10 0 9,875 12 9875 40,125 22 4,6175 85,525 24 14,605 163,300 32 33 271 5 207,350 35 47,3675 311,025 37 83 653 75 Head of household Threshold Rate Cummulative tax 0 10 0 14,100 1 410 53,700 22 6,162 85,500 24 13 158 163,300 31 830 207,350 35 45 926 $18 400 37 154 793 5 Rate 1 Amelia and Addison are your grandparents Amelia and Addison asked you to help them with their tax return in 2020 Below is a few financial info that they provide you Both Amelia and Addison main source of income is from their rental house In 2020, they earned $48,000 in total from their rental properties In the middle of 2020, Addison had heart attack and must go to the emergency room The total medical cost that Addison paid out of pocket was $5000 Knowing that her dad had a bad accidence, Alice came over to visit and gave the old couple a $10,000 check in September 2020 The couple did not immediately cash in the check but plan to only cash it in January 2021 Amelia told you that she hopes that by doing so, she would not have to recognize the amount in 2020 Amelia and Addison paid $24,000 in total on their Texas property tax in 2020 On their Vegas trip in early 2020, Amelia played Blackjack and won $2000 However, Addison was not that lucky and lost S1000 a) What filing status do you recommend for Amelia and Addison b) What is Amelia and Addison Gross income (Provide detailed explanation on why or why not you include certain items Failing to provide explanation will got point deducted) c) What is Amelia and Addison Adjustments For AGI deduction (Provide detailed explanation on why or why not you include certain items Failing to provide explanation will got point deducted) d) What is Amelia and Addison total Itemized deduction (Provide detailed explanation on why or why not you include certain items Failing to provide explanation will got point deducted) e) What is Amelia and Addison standard deduction Show calculation and explanation if needed f) What is Amelia and Addison total taxable income Filing status Married Jointly NOTES 45,000 ( ) 45,000 24,800 24,800 200 Gross Income Adjustments (Above the Line deductions) Adjusted Gross Income (AGI) From AGI deduction Greater of (a) Standard deduction OR (b) Itemized deduction Deduction for Qual Business Income Taxable income Marginal Tax rate Income tax liability Credit Prepayment Tax due or (Tax refund) 20,200 129 2,029 ( ) 2,029 Fed income tax brackets Tax rate Husband Wific Both wife and husband Tax rate Single Taxable income bracket Tax owed 10 50 to 9 875 10 of taxable income 12 89,876 to $40,125 $987 50 plus 12 of the amount over $9 875 229 540,126 to $85 525 54 617 50 plus 22 of the amount over $40,125 24 585 526 to $163 300 $14 605 50 plus 20 of the amount over $85 525 3295163,301 to $207,350 $33 271 50 plus 32 of the amount over S163,300 35 $207,351 to $$18 400 547 367 50 plus 35 of the amount over $207,350 37 5518,401 or more $156,235 plus 37 of the amount over $518,400 Married filling jointly Taxable income bracket Tax owed 10 50 to $19,750 10 of taxable income 12 $19,751 to $80,250 $1,975 plus 12 of the amount over $19 750 22 580,251 to $171,050 $9 235 plus 22 of the amount over $0,250 24 8171,051 to $326,600 $29 211 plus 24 of the amount over $171,050 32 5326,601 to $414,700 $66 543 plus 32 of the amount over $326,600 35 5414,701 to 5622,050 $94 735 plus 35 of the amount over $414 700 37 $622,051 or more $167 307 50 plus 37 of the amount over $622,050 Married filing Meparately Taxable income bracket Tax owed 10 50 to $9,875 10 of taxable income 12 89 876 to $40,125 $987 50 plus 12 of the amount over $9 875 22 540,126 to 585,525 $4 617 50 plus 22 of the amount over $40 125 24 585 526 to $163,300 $14 605 50 plus 24 of the amount over $85 525 32 S163,301 to $207,350 $33 271 50 plus 32 of the amount over $163 300 35 $207,351 to $311,025 $47 367 50 plus 35 of the amount over $207,350 37 $11 026 or more $83 653 75 plus 37 of the amount over $311,025 Head of household Taxable income bracket Tax owed 10 50 to $14,100 10 of taxable income 12 $14,101 to $53,700 $1,410 plus 12 of the amount over $14,100 22 553,701 to $85,500 56,162 plus 22 of the amount over $53,700 24 585,501 to $163,300 $13,158 plus 24 of the amount over $85,500 32 8163,301 to $207,350 $31 830 plus 32 of the amount over S163,300 35 $207,351 to $$18 400 $45 926 plus 35 of the amount over $207,350 37 $518,401 or more S154 793 50 plus 37 of the amount over $518,400 Tax rate Tax rate 2020 Standard Deduction Filing Status Deduction Amount Single Married Piling Jointly Head of Household $12,4001 524 800 $18,650 2020 Child Tax Credit S2000 child 2020 Tax Rates on Long Term Capital Gains For Unmarried Individuals For Married Individuals Filing Joint Returns For Heads of Household Tax Rate Taxable income Over SO SO $80,000 S496,600 $53,600 $469,050 15 $40 000 20 $441,450 Additional Net Investment Incore Tax 3 80 MAGI above $200,000 MAGI above $250,000 MAGI above $200 000 Husband Wife 30,000 50,000 20 125 amount over $9 875 camount over $40,125 the amount over $85 525 the amount over $16 100 the amount over $207,350 amount over $318 400 3 4025 6 790 Taxif each filing separa 10 1925 Both wife and husband Tax joint marriage 80,000 9 205 amount over $19 750 amount over SN3350 camount over $171,050 e amount over $326,600 e amount over $414,700 of the amount over $622,050 e amount over $9 875 the amount over $40,125 the amount over $85 525 the amount over $163,300 the amount over $207,350 the amount over $311,025 amount over $14 100 amount over $53,700 e amount over $85 500 e amount over $163,300 e amount over $207,350 of the amount over $518,400 bital Gains als Filing Joint Returns For Heads of Households SO $80,000 $496,600 SO $53,600 $469,050 MAGI above $200,000 Fed income tax brackets Single Tax rate Taxable income bracket Tax owed 10 S0 to $9 875 10 of taxable income 129 89,876 to 40,125 5987 50 plus 12 of the amount over $9 875 22 540,126 to $85 525 54,617 50 plus 22 of the amount over $40,125 24 585,526 to $163,300 $14,605 50 plus 24 of the amount over $85,525 32 S163,301 to $207,350 $33,271 50 plus 32 of the amount over $163,300 35 $207,351 to $518,400 S47,367 50 plus 35 of the amount over $207,350 37 $518,401 or more S156,235 plus 37 of the amount over $518,400 Married ning jointly Tax rate Taxable income bracket Tax owed 10 50 to $19,750 10 of taxable income 12 $19,751 to $80,250 $1,975 plus 12 of the amount over $19,750 22 580,251 to $171,050 $9,235 plus 22 of the amount over $80,250 24 8171,051 to $326,600 $29,211 plus 24 of the amount over $171,050 32 8326,601 to $414,700 $66,543 plus 32 of the amount over $326,600 35 414,701 to $622,050 $94 735 plus 35 of the amount over $414,700 37 $622,051 or more S167,307 50 plus 37 of the amount over $622,050 Married filling separately Tax rate Taxable income bracket Tax owed 10 50 to $9 875 10 of taxable income 12 89,876 to S40,125 $987 50 plus 12 of the amount over $9,875 22 540,126 to $85,525 S4,617 50 plus 22 of the amount over $40,125 24 585,526 to $163,300 S14,605 50 plus 24 of the amount over $85,525 32 S163,301 to $207,350 $33,271 50 plus 32 of the amount over $163,300 35 $207,351 to $311,025 $47,367 50 plus 35 of the amount over $207,350 37 $311,026 or more $83,653 75 plus 37 of the amount over $311,025 Head of household Tax rate Taxable income bracket Tax owed 10 50 to $14,100 10 of taxable income 12 S14,101 to $53,700 $1,410 plus 12 of the amount over $14,100 22 553,701 to $85,500 $6,162 plus 22 of the amount over $53,700 24 585,501 to $163,300 $13,158 plus 24 of the amount over $85,500 32 5163,301 to $207,350 $31 830 plus 32 of the amount over $163,300 35 $207,351 to $518,400 $45 926 plus 35 of the amount over $207,350 37 5518,401 or more S154,793 50 plus 37 of the amount over $518,400 Taxable income 20 200 Single Threshold Rate Cummulative tax 0 10 0 9 875 12 9875 40,125 22 4,6175 85,525 14,605 163,300 33 271 5 207,350 35 47,3675 518,400 37 156,235 Married filing jointly Threshold Rate Cummulative tax 0 10 0 19 750 12 1,975 80,250 22 9,235 171 050 24 29,211 326,600 32 66,543 414 700 35 94,735 622,050 37 167,307 5 Married filling separately Threshold Cummulative tax 0 10 0 9,875 12 9875 40,125 22 4,6175 85,525 24 14,605 163,300 32 33 271 5 207,350 35 47,3675 311,025 37 83 653 75 Head of household Threshold Rate Cummulative tax 0 10 0 14,100 1 410 53,700 22 6,162 85,500 24 13 158 163,300 31 830 207,350 35 45 926 $18 400 37 154 793 5 Rate

Question

1  Amelia and Addison are your grandparents  Amelia and Addison asked you to help them with their tax return in 2020  Below is a few financial info that they provide you  Both Amelia and Addison main source of income is from their rental house  In 2020, they earned $48,000 in total from their rental properties  In the middle of 2020, Addison had heart attack and must go to the emergency room  The total medical cost that Addison paid out of pocket was $5000 Knowing that her dad had a bad accidence, Alice came over to visit and gave the old couple a $10,000 check in September 2020  The couple did not immediately cash in the check but plan to only cash it in January 2021  Amelia told you that she hopes that by doing so, she would not have to recognize the amount in 2020  Amelia and Addison paid $24,000 in total on their Texas property tax in 2020 On their Vegas trip in early 2020, Amelia played Blackjack and won $2000  However, Addison was not that lucky and lost S1000  a) What filing status do you recommend for Amelia and Addison  b) What is Amelia and Addison Gross income  (Provide detailed explanation on why or why not you include certain items  Failing to provide explanation will got point deducted) c) What is Amelia and Addison Adjustments For AGI deduction (Provide detailed explanation on why or why not you include certain items  Failing to provide explanation will got point deducted) d) What is Amelia and Addison total Itemized deduction  (Provide detailed explanation on why or why not you include certain items  Failing to provide explanation will got point deducted) e) What is Amelia and Addison standard deduction  Show calculation and explanation if needed  f) What is Amelia and Addison total taxable income  Filing status Married Jointly NOTES 45,000 ( ) 45,000 24,800 24,800 200 Gross Income Adjustments (Above the Line deductions) Adjusted Gross Income (AGI) From AGI deduction  Greater of (a) Standard deduction OR (b) Itemized deduction Deduction for Qual  Business Income Taxable income Marginal Tax rate Income tax liability Credit Prepayment Tax due or (Tax refund) 20,200 129 2,029 ( ) 2,029 Fed income tax brackets Tax rate Husband Wific Both wife and husband Tax rate Single Taxable income bracket Tax owed 10 50 to 9 875 10  of taxable income 12  89,876 to $40,125 $987 50 plus 12  of the amount over $9 875 229 540,126 to $85 525 54 617 50 plus 22  of the amount over $40,125 24  585 526 to $163 300 $14 605 50 plus 20  of the amount over $85 525 3295163,301 to $207,350 $33 271 50 plus 32  of the amount over S163,300 35  $207,351 to $$18 400 547 367 50 plus 35  of the amount over $207,350 37  5518,401 or more $156,235 plus 37  of the amount over $518,400 Married filling jointly Taxable income bracket Tax owed 10  50 to $19,750 10  of taxable income 12  $19,751 to $80,250 $1,975 plus 12  of the amount over $19 750 22  580,251 to $171,050 $9 235 plus 22  of the amount over $0,250 24 8171,051 to $326,600 $29 211 plus 24  of the amount over $171,050 32  5326,601 to $414,700 $66 543 plus 32  of the amount over $326,600 35  5414,701 to 5622,050 $94 735 plus 35  of the amount over $414 700 37 $622,051 or more $167 307 50 plus 37  of the amount over $622,050 Married filing Meparately Taxable income bracket Tax owed 10  50 to $9,875 10  of taxable income 12  89 876 to $40,125 $987 50 plus 12  of the amount over $9 875 22  540,126 to 585,525 $4 617 50 plus 22  of the amount over $40 125 24  585 526 to $163,300 $14 605 50 plus 24  of the amount over $85 525 32  S163,301 to $207,350 $33 271 50 plus 32  of the amount over $163 300 35  $207,351 to $311,025 $47 367 50 plus 35  of the amount over $207,350 37  $11 026 or more $83 653 75 plus 37  of the amount over $311,025 Head of household Taxable income bracket Tax owed 10  50 to $14,100 10  of taxable income 12  $14,101 to $53,700 $1,410 plus 12  of the amount over $14,100 22  553,701 to $85,500 56,162 plus 22  of the amount over $53,700 24  585,501 to $163,300 $13,158 plus 24  of the amount over $85,500 32 8163,301 to $207,350 $31 830 plus 32  of the amount over S163,300 35 $207,351 to $$18 400 $45 926 plus 35  of the amount over $207,350 37  $518,401 or more S154 793 50 plus 37  of the amount over $518,400 Tax rate Tax rate 2020 Standard Deduction Filing Status Deduction Amount Single Married Piling Jointly Head of Household $12,4001 524 800 $18,650 2020 Child Tax Credit S2000 child 2020 Tax Rates on Long Term Capital Gains For Unmarried Individuals For Married Individuals Filing Joint Returns For Heads of Household Tax Rate Taxable income Over SO SO $80,000 S496,600 $53,600 $469,050 15  $40 000 20  $441,450 Additional Net Investment Incore Tax 3 80  MAGI above $200,000 MAGI above $250,000 MAGI above $200 000 Husband Wife 30,000 50,000 20 125 amount over $9 875 camount over $40,125 the amount over $85 525 the amount over $16 100 the amount over $207,350 amount over $318 400 3 4025 6 790 Taxif each filing separa 10 1925 Both wife and husband Tax joint marriage 80,000 9 205 amount over $19 750 amount over SN3350 camount over $171,050 e amount over $326,600 e amount over $414,700 of the amount over $622,050 e amount over $9 875 the amount over $40,125 the amount over $85 525 the amount over $163,300 the amount over $207,350 the amount over $311,025 amount over $14 100 amount over $53,700 e amount over $85 500 e amount over $163,300 e amount over $207,350 of the amount over $518,400 bital Gains als Filing Joint Returns For Heads of Households SO $80,000 $496,600 SO $53,600 $469,050 MAGI above $200,000 Fed income tax brackets Single Tax rate Taxable income bracket Tax owed 10  S0 to $9 875 10  of taxable income 129 89,876 to 40,125 5987 50 plus 12  of the amount over $9 875 22  540,126 to $85 525 54,617 50 plus 22  of the amount over $40,125 24  585,526 to $163,300 $14,605 50 plus 24  of the amount over $85,525 32  S163,301 to $207,350 $33,271 50 plus 32  of the amount over $163,300 35 $207,351 to $518,400 S47,367 50 plus 35  of the amount over $207,350 37  $518,401 or more S156,235 plus 37  of the amount over $518,400 Married ning jointly Tax rate Taxable income bracket Tax owed 10  50 to $19,750 10  of taxable income 12  $19,751 to $80,250 $1,975 plus 12  of the amount over $19,750 22  580,251 to $171,050 $9,235 plus 22  of the amount over $80,250 24 8171,051 to $326,600 $29,211 plus 24  of the amount over $171,050 32 8326,601 to $414,700 $66,543 plus 32  of the amount over $326,600 35 414,701 to $622,050 $94 735 plus 35  of the amount over $414,700 37 $622,051 or more S167,307 50 plus 37  of the amount over $622,050 Married filling separately Tax rate Taxable income bracket Tax owed 10  50 to $9 875 10  of taxable income 12  89,876 to S40,125 $987 50 plus 12  of the amount over $9,875 22  540,126 to $85,525 S4,617 50 plus 22  of the amount over $40,125 24  585,526 to $163,300 S14,605 50 plus 24  of the amount over $85,525 32  S163,301 to $207,350 $33,271 50 plus 32  of the amount over $163,300 35 $207,351 to $311,025 $47,367 50 plus 35  of the amount over $207,350 37 $311,026 or more $83,653 75 plus 37  of the amount over $311,025 Head of household Tax rate Taxable income bracket Tax owed 10  50 to $14,100 10  of taxable income 12  S14,101 to $53,700 $1,410 plus 12  of the amount over $14,100 22  553,701 to $85,500 $6,162 plus 22  of the amount over $53,700 24  585,501 to $163,300 $13,158 plus 24  of the amount over $85,500 32  5163,301 to $207,350 $31 830 plus 32  of the amount over $163,300 35 $207,351 to $518,400 $45 926 plus 35  of the amount over $207,350 37  5518,401 or more S154,793 50 plus 37  of the amount over $518,400 Taxable income 20 200 Single Threshold Rate Cummulative tax 0 10 0 9 875 12  9875 40,125 22  4,6175 85,525 14,605 163,300 33 271 5 207,350 35  47,3675 518,400 37  156,235 Married filing jointly Threshold Rate Cummulative tax 0 10  0 19 750 12  1,975 80,250 22  9,235 171 050 24  29,211 326,600 32  66,543 414 700 35  94,735 622,050 37  167,307 5 Married filling separately Threshold Cummulative tax 0 10  0 9,875 12  9875 40,125 22  4,6175 85,525 24  14,605 163,300 32  33 271 5 207,350 35  47,3675 311,025 37  83 653 75 Head of household Threshold Rate Cummulative tax 0 10  0 14,100 1 410 53,700 22  6,162 85,500 24  13 158 163,300 31 830 207,350 35  45 926 $18 400 37  154 793 5 Rate 1  Amelia and Addison are your grandparents  Amelia and Addison asked you to help them with their tax return in 2020  Below is a few financial info that they provide you  Both Amelia and Addison main source of income is from their rental house  In 2020, they earned $48,000 in total from their rental properties  In the middle of 2020, Addison had heart attack and must go to the emergency room  The total medical cost that Addison paid out of pocket was $5000 Knowing that her dad had a bad accidence, Alice came over to visit and gave the old couple a $10,000 check in September 2020  The couple did not immediately cash in the check but plan to only cash it in January 2021  Amelia told you that she hopes that by doing so, she would not have to recognize the amount in 2020  Amelia and Addison paid $24,000 in total on their Texas property tax in 2020 On their Vegas trip in early 2020, Amelia played Blackjack and won $2000  However, Addison was not that lucky and lost S1000  a) What filing status do you recommend for Amelia and Addison  b) What is Amelia and Addison Gross income  (Provide detailed explanation on why or why not you include certain items  Failing to provide explanation will got point deducted) c) What is Amelia and Addison Adjustments For AGI deduction (Provide detailed explanation on why or why not you include certain items  Failing to provide explanation will got point deducted) d) What is Amelia and Addison total Itemized deduction  (Provide detailed explanation on why or why not you include certain items  Failing to provide explanation will got point deducted) e) What is Amelia and Addison standard deduction  Show calculation and explanation if needed  f) What is Amelia and Addison total taxable income  Filing status Married Jointly NOTES 45,000 ( ) 45,000 24,800 24,800 200 Gross Income Adjustments (Above the Line deductions) Adjusted Gross Income (AGI) From AGI deduction  Greater of (a) Standard deduction OR (b) Itemized deduction Deduction for Qual  Business Income Taxable income Marginal Tax rate Income tax liability Credit Prepayment Tax due or (Tax refund) 20,200 129 2,029 ( ) 2,029 Fed income tax brackets Tax rate Husband Wific Both wife and husband Tax rate Single Taxable income bracket Tax owed 10 50 to 9 875 10  of taxable income 12  89,876 to $40,125 $987 50 plus 12  of the amount over $9 875 229 540,126 to $85 525 54 617 50 plus 22  of the amount over $40,125 24  585 526 to $163 300 $14 605 50 plus 20  of the amount over $85 525 3295163,301 to $207,350 $33 271 50 plus 32  of the amount over S163,300 35  $207,351 to $$18 400 547 367 50 plus 35  of the amount over $207,350 37  5518,401 or more $156,235 plus 37  of the amount over $518,400 Married filling jointly Taxable income bracket Tax owed 10  50 to $19,750 10  of taxable income 12  $19,751 to $80,250 $1,975 plus 12  of the amount over $19 750 22  580,251 to $171,050 $9 235 plus 22  of the amount over $0,250 24 8171,051 to $326,600 $29 211 plus 24  of the amount over $171,050 32  5326,601 to $414,700 $66 543 plus 32  of the amount over $326,600 35  5414,701 to 5622,050 $94 735 plus 35  of the amount over $414 700 37 $622,051 or more $167 307 50 plus 37  of the amount over $622,050 Married filing Meparately Taxable income bracket Tax owed 10  50 to $9,875 10  of taxable income 12  89 876 to $40,125 $987 50 plus 12  of the amount over $9 875 22  540,126 to 585,525 $4 617 50 plus 22  of the amount over $40 125 24  585 526 to $163,300 $14 605 50 plus 24  of the amount over $85 525 32  S163,301 to $207,350 $33 271 50 plus 32  of the amount over $163 300 35  $207,351 to $311,025 $47 367 50 plus 35  of the amount over $207,350 37  $11 026 or more $83 653 75 plus 37  of the amount over $311,025 Head of household Taxable income bracket Tax owed 10  50 to $14,100 10  of taxable income 12  $14,101 to $53,700 $1,410 plus 12  of the amount over $14,100 22  553,701 to $85,500 56,162 plus 22  of the amount over $53,700 24  585,501 to $163,300 $13,158 plus 24  of the amount over $85,500 32 8163,301 to $207,350 $31 830 plus 32  of the amount over S163,300 35 $207,351 to $$18 400 $45 926 plus 35  of the amount over $207,350 37  $518,401 or more S154 793 50 plus 37  of the amount over $518,400 Tax rate Tax rate 2020 Standard Deduction Filing Status Deduction Amount Single Married Piling Jointly Head of Household $12,4001 524 800 $18,650 2020 Child Tax Credit S2000 child 2020 Tax Rates on Long Term Capital Gains For Unmarried Individuals For Married Individuals Filing Joint Returns For Heads of Household Tax Rate Taxable income Over SO SO $80,000 S496,600 $53,600 $469,050 15  $40 000 20  $441,450 Additional Net Investment Incore Tax 3 80  MAGI above $200,000 MAGI above $250,000 MAGI above $200 000 Husband Wife 30,000 50,000 20 125 amount over $9 875 camount over $40,125 the amount over $85 525 the amount over $16 100 the amount over $207,350 amount over $318 400 3 4025 6 790 Taxif each filing separa 10 1925 Both wife and husband Tax joint marriage 80,000 9 205 amount over $19 750 amount over SN3350 camount over $171,050 e amount over $326,600 e amount over $414,700 of the amount over $622,050 e amount over $9 875 the amount over $40,125 the amount over $85 525 the amount over $163,300 the amount over $207,350 the amount over $311,025 amount over $14 100 amount over $53,700 e amount over $85 500 e amount over $163,300 e amount over $207,350 of the amount over $518,400 bital Gains als Filing Joint Returns For Heads of Households SO $80,000 $496,600 SO $53,600 $469,050 MAGI above $200,000 Fed income tax brackets Single Tax rate Taxable income bracket Tax owed 10  S0 to $9 875 10  of taxable income 129 89,876 to 40,125 5987 50 plus 12  of the amount over $9 875 22  540,126 to $85 525 54,617 50 plus 22  of the amount over $40,125 24  585,526 to $163,300 $14,605 50 plus 24  of the amount over $85,525 32  S163,301 to $207,350 $33,271 50 plus 32  of the amount over $163,300 35 $207,351 to $518,400 S47,367 50 plus 35  of the amount over $207,350 37  $518,401 or more S156,235 plus 37  of the amount over $518,400 Married ning jointly Tax rate Taxable income bracket Tax owed 10  50 to $19,750 10  of taxable income 12  $19,751 to $80,250 $1,975 plus 12  of the amount over $19,750 22  580,251 to $171,050 $9,235 plus 22  of the amount over $80,250 24 8171,051 to $326,600 $29,211 plus 24  of the amount over $171,050 32 8326,601 to $414,700 $66,543 plus 32  of the amount over $326,600 35 414,701 to $622,050 $94 735 plus 35  of the amount over $414,700 37 $622,051 or more S167,307 50 plus 37  of the amount over $622,050 Married filling separately Tax rate Taxable income bracket Tax owed 10  50 to $9 875 10  of taxable income 12  89,876 to S40,125 $987 50 plus 12  of the amount over $9,875 22  540,126 to $85,525 S4,617 50 plus 22  of the amount over $40,125 24  585,526 to $163,300 S14,605 50 plus 24  of the amount over $85,525 32  S163,301 to $207,350 $33,271 50 plus 32  of the amount over $163,300 35 $207,351 to $311,025 $47,367 50 plus 35  of the amount over $207,350 37 $311,026 or more $83,653 75 plus 37  of the amount over $311,025 Head of household Tax rate Taxable income bracket Tax owed 10  50 to $14,100 10  of taxable income 12  S14,101 to $53,700 $1,410 plus 12  of the amount over $14,100 22  553,701 to $85,500 $6,162 plus 22  of the amount over $53,700 24  585,501 to $163,300 $13,158 plus 24  of the amount over $85,500 32  5163,301 to $207,350 $31 830 plus 32  of the amount over $163,300 35 $207,351 to $518,400 $45 926 plus 35  of the amount over $207,350 37  5518,401 or more S154,793 50 plus 37  of the amount over $518,400 Taxable income 20 200 Single Threshold Rate Cummulative tax 0 10 0 9 875 12  9875 40,125 22  4,6175 85,525 14,605 163,300 33 271 5 207,350 35  47,3675 518,400 37  156,235 Married filing jointly Threshold Rate Cummulative tax 0 10  0 19 750 12  1,975 80,250 22  9,235 171 050 24  29,211 326,600 32  66,543 414 700 35  94,735 622,050 37  167,307 5 Married filling separately Threshold Cummulative tax 0 10  0 9,875 12  9875 40,125 22  4,6175 85,525 24  14,605 163,300 32  33 271 5 207,350 35  47,3675 311,025 37  83 653 75 Head of household Threshold Rate Cummulative tax 0 10  0 14,100 1 410 53,700 22  6,162 85,500 24  13 158 163,300 31 830 207,350 35  45 926 $18 400 37  154 793 5 Rate

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1. Amelia and Addison are your grandparents. Amelia and Addison asked you to help them with their tax return in 2020. Below is a few

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