Assignment 1 Computing Tax Exercises Use Chapter 3 of your textbook to answer these questions in a Word document List all of the components of the tax formula for individuals and provide at least three examples of each of the following Income Exclusions Above the Line Deductions (Deductions for AGI) Below the Line Deductions (Deductions from AGI) Credits Identify the optimal filing status and calculate taxable income for each of the following Abby is single and has two children, ages 12 and 15 Her AGI is $70,000 and her itemized deductions total $4,000 Bob is single and has two children, ages 14 and 20 The 20 year old child attends college full time and is otherwise supported by Bob Bob's AGI is $60,000 and his itemized deductions total $7,500 Corina is widowed, her spouse having passed away during the current tax year She has three children, ages 14, 16, and 20 The 20 year old child works full time and Corina does not provide more than half of the child's support Corina's AGI is $80,000 and her itemized deductions total $9,500 Calculate taxable income for David (filing status single, age 37, no dependents) based on the following information Salary $75,000 Interest Earned on Bank Savings Account $5,000 Interest Earned on Municipal Bond $4,000 Alimony Payments Made $8,000 Child Support Payments Made $12,000 Gift Received From Parents $20,000 Bonus Received From Work $10,000 Itemized Deductions $4,500 Emily (single, age 23) is a full time college student attending graduate school She works as a tutor and has gross income of $5,000 Her W 2 indicates that $600 was withheld by her employer during the current taxable year for federal income taxes Assume that another taxpayer can claim Emily as a dependent Is Emily legally bound to file a tax return Are there any other reasons why she should file

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Assignment 1: Computing Tax Exercises

Use Chapter 3 of your textbook to answer these questions in a Word document.

List all of the components of the tax formula for individuals and provide at least three examples of each of the following:

Identify the optimal filing status and calculate taxable income for each of the following:
Abby is single and has two children, ages 12 and 15. Her AGI is $70,000 and her itemized deductions total $4,000.
Bob is single and has two children, ages 14 and 20. The 20-year-old child attends college full-time and is otherwise supported by Bob. Bob's AGI is $60,000 and his itemized deductions total $7,500.
Corina is widowed, her spouse having passed away during the current tax year. She has three children, ages 14, 16, and 20. The 20-year-old child works full-time and Corina does not provide more than half of the child's support. Corina's AGI is $80,000 and her itemized deductions total $9,500.
Calculate taxable income for David (filing status - single, age 37, no dependents) based on the following information:

Emily (single, age 23) is a full-time college student attending graduate school. She works as a tutor and has gross income of $5,000. Her W-2 indicates that $600 was withheld by her employer during the current taxable year for federal income taxes. Assume that another taxpayer can claim Emily as a dependent. Is Emily legally bound to file a tax return? Are there any other reasons why she should file?