Question
Please show work, thanks. Steve (age 40) and Edie (age 39) Brady are married. Steve works as a retail manager and Edie is a self-employed
Please show work, thanks.
Steve (age 40) and Edie (age 39) Brady are married. Steve works as a retail manager and Edie is a self-employed architect but does not maintain a home office. She does NOT qualify for the Qualified Business Income (QBI) deduction. Their 2019 tax and other information are as follows:
Salary Steve | 70,000 |
Federal withholding on salary | 10,000 |
State withholding on salary | 4,000 |
Interest income on municipal bonds: | |
State of Connecticut | 1,000 |
Savings account interest | 1,500 |
Dividends from RGR, Inc. (all are non-qualified) | 2,500 |
Value of employer provided medical insurance | 3,000 |
Inheritance from Steves fathers estate | 9,000 |
Interest paid on personal car loan | 1,800 |
Interest paid on personal loan | 1,100 |
Child support paid to Steves ex-wife | 10,000 |
Alimony paid to Steves ex-wife divorced in 2010 | 8,000 |
Qualified Out of Pocket Medical Expenses | 3,700 |
Donations to church Real Estate taxes on primary residence | 2,200 6,000 |
Mortgage interest on primary residence (<$1M) | 4,000 |
Edies business revenues | 58,000 |
Edies business expenses | 25,000 |
Required: Using the tax formula format, determine the following for the Bradys 2019 tax year (show all calculations):
- All Income $___________
- Exclusions (if any) $ ___________
- Gross income (including Edies 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 2019 tax year. You must use appropriate 2019 amounts for standard deduction, exemptions, and tax calculations.
Tax Formula for Individuals!
Posted on: Thursday, May 21, 2020 12:00:00 AM EDT
The tax formula, as detailed below, establishes the framework for the Federal income tax on individuals. As you work through the course materials, please refer back to the tax formula.
Tax formula
Income broadly defined | $ xx,xxx |
Less: Exclusions | (x,xxx) |
Gross Income | $ xx,xxx |
Less: Deductions for adjusted gross income | (x,xxx) |
Adjusted gross income | $ xx,xxx |
Less: The greater of - |
|
Total itemized deductions or standard deduction | (x,xxx) |
Less: deduction for qualified business income | (x,xxx) |
Taxable income | $ xx,xxx |
Tax on taxable income | x,xxx |
Plus: Other taxes | xxx |
Total tax | $ x,xxx |
Less: Tax credits | xxx |
Less: Pre-payments | (xxx) |
Tax due (or refund) | $ xx,xxx |
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