Question
Cyclops and Storm Marvel got married 10 years ago and have a 5-year-old son Magneto. Storms daughter from a previous relationship, Mystique also lives with
Cyclops and Storm Marvel got married 10 years ago and have a 5-year-old son Magneto. Storms daughter from a previous relationship, Mystique also lives with them. Mystique is 22 years old, unemployed and currently a full time student at Thanos University. In 2020, Cyclops worked as a computer programmer and analyst earning a salary of $287,600, and Storm worked part-time as a receptionist for a law firm earning a salary of $49,000. Cyclops also does some Web design work on the side and reported revenues of $32,500 and associated expenses of $9,750. Storm runs a craft business from their home. Her craft business consists of making craft items for sale at craft shows that are held periodically at various locations. Storm spends considerable time and effort on her craft business and it has been consistently profitable over the years. Storm also had $7,900 of gambling losses from a girls weekend in Asgard City.
The Marvels reported the following additional information during the year (2020):
- State income taxes of $4,950 paid. Federal tax withholding of $28,000.
- $12,200 of real property taxes.
- $15,500 interest on their home mortgage (acquisition debt of $600,000)
- $5,000 interest on a $90,000 home-equity loan. They used the loan to pay for family vacation and new car.
- $4,350 interest on loans to pay Mystiques tuition
- $32,550 cash charitable contributions to qualified charities.
- Automobile licenses (based on value) $410
- State sales tax paid $3,150
- Interest on Daredevil credit card $2,980
- Penalty for early withdrawal of certificate of deposit $920
- Cost of Storms craft supplies $14,270
- Postage for mailing crafts $1,245
- Travel and lodging for craft shows $3,430
- Storms craft sales revenue $45,050
- Interest from certificate of deposit $4,650
- Storms gambling winnings $4,900
Determine the amounts listed below for Cyclops and Storm for the year.
Gross Income FOR AGI deductions AGI FROM AGI deductions Standard Deduction Taxable Income Tax Liability Prepayments Credits Amount Due or RefundStep by Step Solution
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