Question
PLEASE PLEASE PLEASE HELP!!! Joe and Jessie are married and have one dependent child, Lizzie. Lizzie is currently in college at State University. Joe works
PLEASE PLEASE PLEASE HELP!!!
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 $831. Joe and Jessie have summarized the income and expenses they expect to report this year as follows:
Income: | |
---|---|
Joe's salary | $ 134,100 |
Jessie's craft sales | 18,400 |
Interest from certificate of deposit | 1,650 |
Interest from Treasury bond funds | 716 |
Interest from municipal bond funds | 920 |
Expenditures: | |
Federal income tax withheld from Joe's wages | $ 13,700 |
State income tax withheld from Joe's wages | 6,400 |
Social Security tax withheld from Joe's wages | 7,482 |
Real estate taxes on residence | 6,200 |
Automobile licenses (based on weight) | 310 |
State sales tax paid | 1,150 |
Home mortgage interest | 16,000 |
Interest on Masterdebt credit card | 2,300 |
Medical expenses (unreimbursed) | 1,690 |
Joe's employee expenses (unreimbursed) | 2,400 |
Cost of Jessie's craft supplies | 4,260 |
Postage for mailing crafts | 145 |
Travel and lodging for craft shows | 2,230 |
Self-employment tax on Jessie's craft income | 1,662 |
College tuition paid for Lizzie | 5,780 |
Interest on loans to pay Lizzie's tuition | 3,200 |
Lizzie's room and board at college | 12,620 |
Cash contributions to the Red Cross | 525 |
Determine Joe and Jessie's AGI and taxable income for the year.
Note: Round your intermediate calculations to the nearest whole dollar amount.
Additional Information:
1. Neither Joe nor Jessie want $3 to go to the Presidential Election Campaign.
2. Joe and Jessie did not receive, sell, send, exchange, or otherwise acquire any financial interest in any virtual currency this year.
3. Joe and Jessies dependent daughter, Lizzie, is 17 years old.
4. Hint: If you determine any deduction needs to be phased-out, be sure to read the applicable section in your textbook about how to calculate the phase-out and the allowable portion of the deduction. This will apply to the student interest deduction.
5. For self-employed taxpayers, qualified business income, for purposes of calculating the qualified business income deduction, is reduced by the deductible portion of self-employment taxes and the self-employed health insurance deduction.
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