Income Taxes Problem PR 1, 2 and 3

Homework Problem I Dwayne Johnson is single and living alone. He had income and expenditures for the year as follows. Salary income (from W-2) $87,000 Interest income from: Bank account Maricopa County bonds Inheritance from grandparent 20,000 Contribution to Roth I.R.A. Interest expense on student loan (2,000) + 1,400 3,000 (5,000$ 6,000 1,100- Potential Itemized Deductions: Interest expense on home mortgage Interest expense on car loan Interest expense on credit cards Property taxes paid (car and home) Charitable contributions Federal income tax withheld State income tax withheld 300 2,700 3,000 12,000 2,000 13,700 Compute the amount of: a) taxable income, b) income taxes, and c) amount of tax to be paid (refunded) Note: It is not acceptable to submit this page as homework. Prepare answer, in good form, on a separate sheet. IRS ACC 212 / 240 Incone Taxes - Page 16 Homework Problem II Mila Kunis is a single parent living with her two daughters, whom she provides all support. Her daughters are age 12 and 19 years old, with the eldest attending GCC. During the past year, her investments have appreciated from a cost of $20,000 to a year-end value of $22,000. She had income and expenditures for the year as follows. Salary $73,000 Prizes won on Wheel of Fortune 3,000 Interest income from: Bank account 1,000 City of Mesa bonds 2,000 Illegal income 7,000 Inheritance received 40,000 Gift from parent 10,000 Contribution to Roth I.R.A. (5,000) Potential Itemized Deductions: Diamondbacks season tickets Food Interest expense on car loan Interest expense on home mortgage Property taxes paid (car and home) Charitable contributions Federal income tax withheld State income tax withheld Tuition and books for GCC 4,400 5,000 1,200 6,000 2,000 2,000 6,000 3,000 2,800 Tax L Compute the amount of: a) taxable income, b) income taxes, and c) amount of tax to be paid (refunded) Note: It is not acceptable to submit this page as homework. Prepare answer, in good form, on a separate sheet. ACC 212 / 240 Income Taxes - Page 17 Homework Problem III John and Chrissy Legend, a married couple with four daughters (twins age 15, an 18 year old freshman at GCC and the oldest 13 23 and a graduate student at ASU West), have income and expenditures for the year as follows. They file a joint return. $85,000 10,000 Salaries ($60,000 and $25,000) Speaking fees earned Interest income from: Bank account Maricopa Community College bonds Inheritance received Gift from parents Contribution to Traditional I.R.A. (401k) 2,000 3,000 50,000 20,000 3,000 Potential Itemized Deductions: Arizona Cardinals season tickets Food Interest expense on credit cards Interest expense on home mortgage Interest expense on car loans Property taxes paid (cars and home) Charitable contributions Federal income tax withheld State income tax withheld Tuition and books paid to: GCC ASU 4,000 6,000 1,000 11,000 2,000 2,500 4,000 2,000 1,000 3,200 9,000 Compute the amount of: a) taxable income, b) income taxes, and c) amount of tax to be paid (refunded) Note: It is not acceptable to submit this page as homework. Prepare answer, in good form, on a separate sheet. IRS ACC 212 / 240 Income Taxes - Page 18