Question
Mike (age 40) and Carol (age 39) Brady are married. Carol works as a retail manager and Mike is a self-employed architect but does not
Mike (age 40) and Carol (age 39) Brady are married. Carol works as a retail manager and Mike is a self-employed architect but does not maintain a home office. Their2016tax and other information are as follows:
Salary Carol | 80,000 |
Federal withholding on salary | 20,000 |
State withholding on salary | 5,000 |
Interest income on municipal bonds: | |
State of Connecticut | 2,000 |
Savings account interest | 1,000 |
Dividends from RGR, Inc. (all are non-qualified) | 4,000 |
Value of employer provided medical insurance | 3,000 |
Inheritance from Carols fathers estate | 7,000 |
Interest paid on personal car loan | 1,500 |
Interest paid on personal loan | 1,000 |
Child support paid to Mikes ex-wife | 10,000 |
Alimony paid to Mikes ex-wife | 6,000 |
Qualified Out of Pocket Medical Expenses | 3,000 |
Donations to church Real Estate taxes on primary residence | 2,500 6,000 |
Mortgage interest on primary residence (<$1M) | 4,000 |
Mikes business revenues | 50,000 |
Mikes business expenses | 15,000 |
Required: Using the tax formula format, determine the following for the Bradys2016 tax year(show all calculations):
All Income $___________
Exclusions (if any) $ ___________
Gross income (including Mikes SE income) $ ___________
Deductions For AGI $ ___________
Adjusted gross income $ ___________
Itemized deduction or standard deduction amount $ ___________
Deduction for exemptions $ ___________
Taxable income $ ___________
Income tax liability $ ___________
Self-employment tax liability $ ___________
Net tax due or refund (show calculation) $ ___________
Remember:This is for the 2016 tax year. You must use appropriate 2016 amounts for standard deduction, exemptions, and tax calculations.
PLEASE SHOW CALCULATIONS. Thanks!!
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