Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

James and Esther Johnson live at 45678 S.W. 112th Street, Homestead, FL 33033. James, who is 67 years old (date of birth 12/14/1950), is retired

James and Esther Johnson live at 45678 S.W. 112th Street, Homestead, FL 33033. James, who is 67 years old (date of birth 12/14/1950), is retired receiving social security benefits and Esther, who is 66 years old (date of birth 06/11/1951), is also retired but working on a part-time basis. Their social security numbers are 412-34-5670 and 412-34-5671, respectively. The Johnsons had qualifying health care coverage at all times during the tax year. Annual social security income for Jim is $18,000 (SSA-1099, box 5) and for Esther is $10,800 (SSA-1099, box 5). Interest received by them from Central Bank is $2,545 (1099-INT, box 1). No income tax withholding was made. Esther is working part-time as an interior decorator as an employee of Decorating House, a corporation. Her form W-2 shows the following information:

Wages = $ 15,000.00
Federal W/H = $ 1,500.00
Social security wages = $ 15,000.00
Social security W/H = $ 930.00
Medicare wages = $ 15,000.00
Medicare W/H = $ 217.50

Their itemized deductions are as follows:

Mortgage interest on their main home = $8,100

Real estate taxes = $5,600

Personal property taxes = $185

Doctors' expenses unreimbursed by insurance = $5,400

Medical insurance premiums for the year = $2,400

Prescribed medicine = $1,995

Vitamins = $300

Total cash contributions to their church, $675. The contributions were made over the course of the year and no individual contribution was greater than $250.

Tax preparation fees for their 2016 return, $325, paid in 2017.

Lottery tickets bought by Esther during the year, $750. Winnings received, $940 (W-2G, box 1). Income tax withholding on winnings, $35 (W-2G, box 4).

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Comparative International Accounting Subsequent Edition

Authors: Christopher Nobes, R. H. Parker

5th Edition

0137364636, 9780137364633

More Books

Students also viewed these Accounting questions