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Anthony, one of your cousins, is operating a very successful luxury nail salon called An-Toe-Nail. Other than that, Anthony is also work part-time as a

Anthony, one of your cousins, is operating a very successful luxury nail salon called An-Toe-Nail. Other than that, Anthony is also work part-time as a freelancer graphic designer. In 2020, Anthony have the income from his designing job of $100k and the revenue from the An-Toe-Nail salon is $800k. During 2020, below are items that Anthony spend money on:

  • Anthony purchased a new car in Jan 2020 which cost $60k. The car is his main vehicle for the year which he will use to drive to and from work.
  • Employee salary: $300k in total, paying for 6 nail technicians, each $50k/year.
  • Utilities cost: $10k
  • Supplies (nail polishes, glitter, chemical, etc.): $10k
  • Nail salon equipment: $50k. Anthony told you that these equipment need to be purchased new every year for some reason. Since the nail salon is a luxury one, he spent twice the money to buy this luxury equipment (the similar but lower quality equipment only cost $25k).

Anthony asks for your help in figuring out his taxable income for 2020 before the standard deduction. As a tax expert, you understand that what he means was to help him calculate his AGI.

  1. What is Anthony Gross income in 2020? (Show calculation and explanation if needed)
  2. What is Anthony Deduction for AGI in 2020? Show calculation and explanation. Answer without explanation will result in no credit
  3. Provided that AGI = Total Gross income Total Deduction for AGI. What is Anthony AGI for 2020?

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