Question
1a. Kevin is single. In 2020, he earned $65,000 in salary this year from his employer and received $10,000 in alimony from his ex-wife. They
1a. Kevin is single. In 2020, he earned $65,000 in salary this year from his employer and received $10,000 in alimony from his ex-wife. They divorced on July 1, 2017. His employer withheld $9,000 in tax from his salary this year. In addition to the above, the following occurred this year:
He decided he did not like his nose. So he paid $2,000 in cosmetic surgery to make it larger and more defined.
He paid $2,500 in union dues and for subscriptions to publications related to his work that were not reimbursed by his employer.
He paid $15,000 in rent his apartment for the year.
Fill in the blank: Kevin's AGI for 2020 is $_______.
1b. Fill in the blank: Ignore your answer in a). Assume that Kevins AGI for the year is $78,650. The amount of itemized deduction Kevin has available this year is $_______.
1c. Ignore your answer in b). Assume that the amount of itemized deduction available is $2,780. Using the 2020 standard deduction amounts (assuming no additional amounts for age or blindness) from Appendix D in your book, determine whether Kevin will itemize or take the standard deduction.
A. | Itemize | |
B. | Standard Deduction |
1d. Fill in the blank: Ignore your answer in a) - c). Assume that Kevins taxable income is $42,720 and his employer withheld $9,000 in tax from his wages. Using the tax rate schedule from Appendix D in your book, the amount of taxes due or the amount of refund due is $_______. Remember that if the amount represents tax due this is entered as a positive value (e.g. syntax: a $5,000 tax due amount should be entered as 5000) whereas if the amount represents a tax refund this is entered as a negative value (e.g. syntax: a $5,000 tax refund amount should be entered as -5000). Assume AMT does not apply, and there are no tax credits available.
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