Continuing Case 20. Income Tax Estimation Jamie Lee Jackson, age 26, is in her last semester of college and is waiting for graduation day that is just around the corner! It is the time of year again when Jamie Lee must file her annual federal income taxes. Last year, she received an increase in salary from the bakery, which brought her gross monthly earnings to $3,400, and also opened up an IRA, to which she contributed $450 last year. Her savings accounts earn 2% interest per year, and she also had received an unexpected $2,350 gift from her great aunt. Jamie was also lucky enough last year to win a raffle prize of $3,700, most of which was deposited into her regular savings account after paying off her credit card balance. Estimate Jamie Lee's current tax liability by completing the form below. Use the 2016 values for standard deduction ($6,300) and personal exemption ($4,050). Each answer must have a value for the assignment to be complete. Enter "O" for any unused categories. $2,950 $8,600 $210 Monthly Expenses: Rent obligation Utilities Food $360 $220 $215 Current Financial Situation Assets: Checking account Savings account (Interest earned last year) Emergency fund savings account (Interest earned last year) IRA balance (Contribution made last year) Car Liabilities: $5,600 Gas/maintenance $195 $0 $95 $520 $450 $4,700 Credit card payment Savings allocation: Regular savings (monthly) Rainy day savings (monthly) Entertainment: Cake decorating class Movies with friends $185 $35 Student loan $60 $12,500 $0 Credit card balance $80 (Interest paid last year) $80 Income: Gross monthly salary $3,400 Estimated Income Tax Gross income (wages, salary, investment income, and other ordinary income) Less adjustments to income (see current tax regulations) Equals adjusted gross income Less standard deduction (use 2016 amounts) or Itemized deductions (whichever total is larger) Medical expenses (exceeding 10% of AGI) State/local income and property taxes Mortgage, home equity loan interest Contributions Casualty and theft losses Moving, job-related, and miscellaneaous expenses (exceeding 2% of AGI) Total itemized deductions Larger of standard or itemized deductions Less personal exemptions Equals taxable income Estimated tax (based on 2016 tax tables) Less tax credits Plus other taxes Equals total tax liability Less estimated withholding and payments Equals tax due (or refund) Continuing Case 20. Income Tax Estimation Jamie Lee Jackson, age 26, is in her last semester of college and is waiting for graduation day that is just around the corner! It is the time of year again when Jamie Lee must file her annual federal income taxes. Last year, she received an increase in salary from the bakery, which brought her gross monthly earnings to $3,400, and also opened up an IRA, to which she contributed $450 last year. Her savings accounts earn 2% interest per year, and she also had received an unexpected $2,350 gift from her great aunt. Jamie was also lucky enough last year to win a raffle prize of $3,700, most of which was deposited into her regular savings account after paying off her credit card balance. Estimate Jamie Lee's current tax liability by completing the form below. Use the 2016 values for standard deduction ($6,300) and personal exemption ($4,050). Each answer must have a value for the assignment to be complete. Enter "O" for any unused categories. $2,950 $8,600 $210 Monthly Expenses: Rent obligation Utilities Food $360 $220 $215 Current Financial Situation Assets: Checking account Savings account (Interest earned last year) Emergency fund savings account (Interest earned last year) IRA balance (Contribution made last year) Car Liabilities: $5,600 Gas/maintenance $195 $0 $95 $520 $450 $4,700 Credit card payment Savings allocation: Regular savings (monthly) Rainy day savings (monthly) Entertainment: Cake decorating class Movies with friends $185 $35 Student loan $60 $12,500 $0 Credit card balance $80 (Interest paid last year) $80 Income: Gross monthly salary $3,400 Estimated Income Tax Gross income (wages, salary, investment income, and other ordinary income) Less adjustments to income (see current tax regulations) Equals adjusted gross income Less standard deduction (use 2016 amounts) or Itemized deductions (whichever total is larger) Medical expenses (exceeding 10% of AGI) State/local income and property taxes Mortgage, home equity loan interest Contributions Casualty and theft losses Moving, job-related, and miscellaneaous expenses (exceeding 2% of AGI) Total itemized deductions Larger of standard or itemized deductions Less personal exemptions Equals taxable income Estimated tax (based on 2016 tax tables) Less tax credits Plus other taxes Equals total tax liability Less estimated withholding and payments Equals tax due (or refund)