Question
Joe and Jessie are married and have one dependent child, Lizzie. Lizzie is currently in college at State University. Joe works as a design engineer
Joe and Jessie are married and have one dependent child, Lizzie. Lizzie is currently in college at State University. Joe works as a design engineer for a manufacturing firm, while Jessie runs a craft business from their home. Jessie's craft business consists of making craft items for sale at craft shows that are held periodically at various locations. Jessie spends considerable time and effort on her craft business, and it has been consistently profitable over the years. Joe and Jessie own a home and pay interest on their home loan (balance of $220,000) and a personal loan to pay for Lizzie's college expenses (balance of $35,000). Neither Joe nor Jessie is blind or over age 65, and they plan to file as married-joint. Assume that the employer portion of the self-employment tax on Jessie's income is $840. Joe and Jessie have summarized the income and expenses they expect to report this year as follows: Income: Joe's salary $ 135,000 Jessie's craft sales 18,490 Interest from certificate of deposit 1,740 Interest from Treasury bond funds 734 Interest from municipal bond funds 938 Expenditures: Federal income tax withheld from Joe's wages $ 13,700 State income tax withheld from Joe's wages 6,580 Social Security tax withheld from Joe's wages 7,518 Real estate taxes on residence 6,380 Automobile licenses (based on weight) 328 State sales tax paid 1,240 Home mortgage interest 16,900 Interest on Masterdebt credit card 2,480 Medical expenses (unreimbursed) 1,780 Joe's employee expenses (unreimbursed) 2,580 Cost of Jessie's craft supplies 5,250 Postage for mailing crafts 154 Travel and lodging for craft shows 2,320 Self-employment tax on Jessie's craft income 1,680 College tuition paid for Lizzie 5,960 Interest on loans to pay Lizzie's tuition 3,380 Lizzie's room and board at college 12,800 Cash contributions to the Red Cross 570
Required information [The following information applies to the questions displayed below.] Joe and Jessie are married and have one dependent child, Lizzie. Lizzie is currently in college at State University. Joe works as a design engineer for a manufacturing firm, while Jessie runs a craft business from their home. Jessie's craft business consists of making craft items for sale at craft shows that are held periodically at various locations. Jessie spends considerable time and effort on her craft business, and it has been consistently profitable over the years. Joe and Jessie own a home and pay interest on their home loan (balance of $220,000 ) and a personal loan to pay for Lizzie's college expenses (balance of $35,000 ). Neither Joe nor Jessie is blind or over age 65, and they plan to file as married-joint. Assume that the employer portion of the self-employment tax on Jessie's income is $840. Joe and Jessie have summarized the income and expenses they expect to report this year as followsStep by Step Solution
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