****************************************************Personal, Dependency exemption: $3,950

Filing Status Deduction*	Basic Standard Deduction**	Additional Standard	Social Security Base Amounts
Married Joint	$12,400	$1,200	$32,000\$44,000
Single	6,200	1,550	$25,000\$34,000
Head of Household	9100	1550	$25,000\$34,000

*Special rules if claimed on someone elses tax return

**Blind taxpayer, taxpayer 65 or older

Self employment taxes are assessed at 15.35% of net* self-employment income below $117,000 and at 2.9% on the excess. *net=92.35% of the amount reported. Note that the $117,000 amount is reduced by wages paid. Salary does not reduce the 2.9% tax

Tax rate on qualified dividents

0%--MTR 10% or 15%

15%--MTR between 25% and 35%

20%--MTR=39.6%

1. Mary, age 68 and Bob, age 70 paid $250,000 for a joint and survivorship annuity that will pay $15,000 per year as long as both are alive. Upon the death of one spouse, the payments will drop to $13,000 per year as long as the second spouse remains alive. How much income related to the annuity must be included in income in Year one! Mary and Bob are both alive.

2. Kevin is a candidate for an undergraduate degree at a local university. During 2014, he was granted a football scholarship that provided the following:

Incidental Expenses $2,300

Tuition $22,000

Books and supplies $1,500

Room and board 18,800

What amount should Kevin exclude from gross income in 2014?