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 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 12% 2,029 (-) - 2,029 Fed income tax brackets Tax rate Hushand Wife Both wife and husband Tax rate Single Taxable income hacket Taroud 104650 to $9,875 ION of taxable income 12959,876 to $40,125 $987.50 plus 12% of the amount over $9.575 2296540,126 10 $85.525 54,617.50 plus 22% of the amount over $40,125 24% 585.526 10 $16,300 $14.605.50 plus 24% of the amount over $53,525 3296516_301 to $207,350 $33.271.50 plus 32% of the amount over $163.300 35% 5207.351 5518,400 547.367.50 plus 35% of the amount over $207,350 379SSIR401 or more $156,235 plus 37% of the amount over $518,400 Married ligt Taxable income bracket Taxowed 10% $0 to $19.750 10% of taxable income 12%$19,751 to $80.250 $1.975 plus 12% of the amount over $19.750 22% SHO,251 to $171,050 $9.235 plus 22% of the amount over $80,250 24% 5171,051 to $326,600 $29.211 plus 24% of the amount over $171.050 32%$326,601 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 $167.307 50 plus 37% of the amount over $622.050 Married filling separately Taxable income bracket Taxoned 10% 50 to $9.875 TON of taxable income 12% 59,876 to 540,125 5987.50 plus 12% of the amount over 59.875 22%$40,126 to $85.525 54,617.50 plus 22% of the amount over 540,125 24% $85,526 to $163,300 $14.605.50 plus 24% of the amount over $83.525 32% 5163,301 to $207,350 $33.271.50 plus 32% of the amount over $163.300 3585207,351 to $111.025 547,167.50 plus 35% of the amount over $207,350 379 311.026 or more $7633.73 plus 37% of the amount over $311,025 rata Taxable income bracket Taxowed 10% 50 to $14,100 TON of taxable income 12% $14,101 to $53,700 $1410 plus 12% of the amount over $14.100 22 553,701 to $5,500 56,162 plus 2 of the amount over 350.00 24% 585,501 to $163.100 $13.135 plus 24 of the amount over 583.300 32%|$163,301 to $207,350 $31,230 plus 32 of the amount over $763,300 35% $207,351 to $518,400 $45.926 plus 35% of the amount over $207,350 37SSIN401 or more 5154,793.50 plus 37% of the amount over $$18.400 Tax rate Tax rate 2020 Standard Deduction Piling Matus Deduction Amount Single Married Filing Jointly Head of Household $127400 $24.800 SI8,650 2020 Child Tax Credit S2000 child 2020 Tax Rates on Long Term Capital Gains For Unmarried Individuals For Married Individuals Filing Joint Returns Tax Rate Taxable income Over For Heads of Households SO $80,000 S496,600 SO S53000 $469,050 1556 540,000 2096 5441.450 Additional Net Investment Income Tax 3.80% MAGI above $200,000 MAGI above $250,000 MAGI above $200,000 Hashed 20.125 30,000 50.000 ument over 500,125 the amount over $3525 the amor 5143,00 the amount over $207.3.50 over SSIR 400 3,4025 6,790 Taxif each filing sep 10.1935 Both wife and husband Tax joint marriage 80,000 205 amet Over $19.750 amount over $150 amount over $171.050 amount over $26.800 amount over $14.700 of the amount over $622.050 over $9.875 che amount over $40.133 the amount over $5525 the amount Over $161 100 the amount over $207.350 the amount over $11.035 amount over $14.100 amount over $53.700 amount over $5.500 amount over $163.300 am over 5207 350 of the amount over $518,000 bital Gains als Filing Joint Returns For Heads of Households SO $80,000 50 $53.600 $469,050 MAGIbove $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 840,125 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 filing 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%$326,601 to $414.700 $66,543 plus 32% of the amount over $326,600 35% 5414.701 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 5987.50 plus 12% of the amount over $9.875 22%$40,126 to $85,525 $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% 5163,301 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%8311,026 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 32% 33.271.5 207,350 35% 47,367.5 518,400 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% 4,6173 85,525 24% 14,605.5 163,300 32% 33.271.5 207,350 35% 47,2675 311,025 17% 83.653.75 Head of household Threshold Rate Cummulative tax 0 10% 0 14,100 12% 1.410 53,700 22% 6,162 85,500 24% 13,158 163,300 32% 31.80 207.350 35% 45.926 518.400 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 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 12% 2,029 (-) - 2,029 Fed income tax brackets Tax rate Hushand Wife Both wife and husband Tax rate Single Taxable income hacket Taroud 104650 to $9,875 ION of taxable income 12959,876 to $40,125 $987.50 plus 12% of the amount over $9.575 2296540,126 10 $85.525 54,617.50 plus 22% of the amount over $40,125 24% 585.526 10 $16,300 $14.605.50 plus 24% of the amount over $53,525 3296516_301 to $207,350 $33.271.50 plus 32% of the amount over $163.300 35% 5207.351 5518,400 547.367.50 plus 35% of the amount over $207,350 379SSIR401 or more $156,235 plus 37% of the amount over $518,400 Married ligt Taxable income bracket Taxowed 10% $0 to $19.750 10% of taxable income 12%$19,751 to $80.250 $1.975 plus 12% of the amount over $19.750 22% SHO,251 to $171,050 $9.235 plus 22% of the amount over $80,250 24% 5171,051 to $326,600 $29.211 plus 24% of the amount over $171.050 32%$326,601 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 $167.307 50 plus 37% of the amount over $622.050 Married filling separately Taxable income bracket Taxoned 10% 50 to $9.875 TON of taxable income 12% 59,876 to 540,125 5987.50 plus 12% of the amount over 59.875 22%$40,126 to $85.525 54,617.50 plus 22% of the amount over 540,125 24% $85,526 to $163,300 $14.605.50 plus 24% of the amount over $83.525 32% 5163,301 to $207,350 $33.271.50 plus 32% of the amount over $163.300 3585207,351 to $111.025 547,167.50 plus 35% of the amount over $207,350 379 311.026 or more $7633.73 plus 37% of the amount over $311,025 rata Taxable income bracket Taxowed 10% 50 to $14,100 TON of taxable income 12% $14,101 to $53,700 $1410 plus 12% of the amount over $14.100 22 553,701 to $5,500 56,162 plus 2 of the amount over 350.00 24% 585,501 to $163.100 $13.135 plus 24 of the amount over 583.300 32%|$163,301 to $207,350 $31,230 plus 32 of the amount over $763,300 35% $207,351 to $518,400 $45.926 plus 35% of the amount over $207,350 37SSIN401 or more 5154,793.50 plus 37% of the amount over $$18.400 Tax rate Tax rate 2020 Standard Deduction Piling Matus Deduction Amount Single Married Filing Jointly Head of Household $127400 $24.800 SI8,650 2020 Child Tax Credit S2000 child 2020 Tax Rates on Long Term Capital Gains For Unmarried Individuals For Married Individuals Filing Joint Returns Tax Rate Taxable income Over For Heads of Households SO $80,000 S496,600 SO S53000 $469,050 1556 540,000 2096 5441.450 Additional Net Investment Income Tax 3.80% MAGI above $200,000 MAGI above $250,000 MAGI above $200,000 Hashed 20.125 30,000 50.000 ument over 500,125 the amount over $3525 the amor 5143,00 the amount over $207.3.50 over SSIR 400 3,4025 6,790 Taxif each filing sep 10.1935 Both wife and husband Tax joint marriage 80,000 205 amet Over $19.750 amount over $150 amount over $171.050 amount over $26.800 amount over $14.700 of the amount over $622.050 over $9.875 che amount over $40.133 the amount over $5525 the amount Over $161 100 the amount over $207.350 the amount over $11.035 amount over $14.100 amount over $53.700 amount over $5.500 amount over $163.300 am over 5207 350 of the amount over $518,000 bital Gains als Filing Joint Returns For Heads of Households SO $80,000 50 $53.600 $469,050 MAGIbove $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 840,125 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 filing 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%$326,601 to $414.700 $66,543 plus 32% of the amount over $326,600 35% 5414.701 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 5987.50 plus 12% of the amount over $9.875 22%$40,126 to $85,525 $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% 5163,301 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%8311,026 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 32% 33.271.5 207,350 35% 47,367.5 518,400 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% 4,6173 85,525 24% 14,605.5 163,300 32% 33.271.5 207,350 35% 47,2675 311,025 17% 83.653.75 Head of household Threshold Rate Cummulative tax 0 10% 0 14,100 12% 1.410 53,700 22% 6,162 85,500 24% 13,158 163,300 32% 31.80 207.350 35% 45.926 518.400 37% 154.793.5 Rate