QUESTION 1 What is the Adjusted Gross Income for Beth Jordan for 2020? QUESTION 2 What is the Taxable income for Beth Jordan for 2020? QUESTION 3 What is the balance due (refund) for Beth Jordan for 2020? 46. Beth R. Jordan lives at 2322 Skyview Road, Mesa, AZ 85201. She is a tax accountant with Mesa Manufacturing Company. 1203 Western Avenue, Mesa, AZ 85201 (employer identification number 11-1111111). She also writes computer software programs for tax practitioners and has a part-time tax practice. Beth is single and has no depen- dents. Beth was born on July 4, 1974, and her Social Security number is 123-45-6785. She did not engage in any vitual currency transactions during the year, and she wants to contribute $3 to the Presidential Election Campaign Fund. Beth received the appro- priate coronavirus recovery rebates (economic impact payments): related questions in ProConnect Tax should be ignored. The following information is shown on Beth's Wage and Tax Statement (Form W-2) for 2020 Line Amount 1 2 3 4 Description Wages, tips, other compensation Federal income tax withheld Social Security wages Social Security tax withheld Medicare wages and tips Medicare tax withheld State State wages, tips, etc. State income tax withheld 5 6 $65,000.00 9,500.00 65,000.00 4,030.00 65,000.00 942.50 Arizona 65,000.00 1,954.00 15 16 17 During the year, Beth received interest of $1,300 from Arizona Federal Savings and Loan and $400 from Arizona State Bank. Each financial institution reported the inter- est income on a Form 1099-INT. She received qualified dividends $800 from Blue Corporation, $750 from Green Corporation, and $650 from Orange Corporation. Each corporation reported Beth's dividend payments on a Form 1099-DIV. Beth received a $1,100 income tax refund from the state of Arizona on April 29, 2020. On her 2019 Federal income tax return, she used the standard deduction. Fees earned from her part-time tax practice in 2020 totaled $3,800. She paid $600 to have the tax returns processed by a computerized tax return service. On February 8, 2020, Beth bought 500 shares of Gray Corporation common stock for $17.60 a share. On September 12, 2020, Beth sold the stock for $14 a share. On January 2, 2020, Beth acquired 100 shares of Blue Corporation common stock for $30 a share. She sold the stock on December 19, 2020, for $55 a share. Both stock transactions were reported to Beth on Form 1099-B; basis was not reported to the IRS. Beth bought a used sport utility vehicle for $6,000 on June 5, 2020. She purchased the vehicle from her brother-in-law, who was unemployed and was in need of cash. On November 2, 2020, she sold the vehicle to a friend for $6,500. During the year, Beth records revenues of $16,000 from the sale of a software program she developed. Beth incurred the following expenses in connection with her software development business. Cost of personal computer $7,000 Cost of printer 2,000 Furniture 3,000 Supplies 650 Fee paid to computer consultant 3,500 Beth elected to expense the maximum portion of the cost of the computer, printer, and furniture allowed under the provisions of $ 179. These items were placed in service on January 15, 2020, and used 100% in her business. CHAPTER 13 Tax Credits and Pay Although her employer suggested that Beth attend an in-person conference on current developments in corporate taxation, Beth was not reimbursed for the travel expenses of $1,420 she incurred in attending the meeting. The $1,420 included $200 for the cost of meals. During the year, Beth paid $300 for prescription medicines and $2,875 for doctor bills and hospital bills. Medical insurance premiums were paid by her employer. Beth paid real property taxes of $1,766 on her home. Interest on her home mortgage (Valley National Bank) was $3,845, and credit card interest was $320. Beth contrib- uted $2,080 in cash to various qualifying charities during the year. Professional dues and subscriptions totaled $350. Beth paid estimated taxes of $1,000. Part 1Tax Computation Compute Beth Jordan's 2020 Federal income tax payable (or refund due), and com- plete her 2020 tax return using appropriate forms and schedules. Suggested software: ProConnect Tax ENTER ALL VALUES AS POSITIVE - DEDUCTIONS AND EXCLUSIONS WILL BE AUTOMATICALLY CALCULATED AS A SUBTRACTION ENTER ALL VALUES IN BLACKBOARD AS WHOLE NUMBERS (NO PENNIES) WITHOUT A DOLLAR SIGN 2020 - Form 1040 POINTS 2020 Maried Filing Joint Single Taxable income Tax Liability $ $ $ $ Head of Household $ $ $ Maried Filing Separate $ $ 0 0.5 0 0.5 Gross Income: Salary Interest income Dividend income State income tax refund Schedule C Net Income Schedule D Net Recognized Gain (Loss) 0 0.5 0 0.5 0 Head of Household Bracket $ 14,100 First Rate 100% 12.02 5 5 4 Rate 10.07 12.07 0 $ 53.700 Maried Filing Joint Bracket $ 19.750 $ 80,250 $ 171,050 $ 326,600 $ 414.700 $ 622,050 $ 622,050 Rate 10.0% 12.02 22.07 24.0% 32.0% 35.0% Single Bracket $ 9,875 $ $ 40.125 $ 85,525 $ 163,300 $ $ 207,350 $ 518.400 $ 518,400 22.0% $ Second Third Fourth Fifth Sixth Seventh Gross Income (subtotal): 0 Maried Filing Separate Bracket Rate $ 9.875 10.07. $ 40.125 12.07. $ 85,525 22.07 $ 163,300 24.02 $ 207,350 32.0% $ 311,025 35.0% %. $ 311,025 37.0% $ 24.0% 32.0% 85,500 163,300 207,350 518,400 518,400 22.07 24.07 32.0% $ $ $ 35.0%. 37.0% 35.0% 37.0% 1 37.0% $ Deductions for AGI: Self-employment tax deduction Nonitemizer charitable contribution deduction Deductions for AGI (subtotal): OOO 1 ADJUSTED GROSS INCOME: 0 13.0 0 0 0 0 Deductions from AGI: Medical expense deduction Sales taxes deduction State income tax deduction Real estate tax deduction Mortgage interest expense deduction Credit card interest expense deduction Charitiable contribution deduction Miscellaneous itemized deductions Total Itemized Deductions 0 0 0 0 0 2 Standard Deduction 0 2 Greater of Standard or itemized 0 0 Qualified Business Income Deduction 0 0 2 2 TAXABLE INCOME: 0 6.0 0.5 1 Tax liability on dividend income Tax liability - Ordinary Income Self-employment tax Less: FIT withholding/estimates O O O O 4 0 0 1 NET BALANCE DUE (REFUND) 0 6.0 25.0 SUPPLEMENTAL SCHEDULE Schedule C POINTS 0.5 O ool 0.5 0.5 Part-time tax practice revenues Software writing business royalties Total gross income Business expenses Part-time tax practice processing fee Cost of personal computer Cost of printer Furniture Supplies Fee paid to computer consultant Total business expenses SCHEDULE C NET INCOME O O O 1 1 1 0 0.25 O ooollo 0.25 0 5 Amount Realized Adjusted Basis Gain (loss) POINTS 0 0 1 Schedule D-short-term transactions Gray stock Utility vehicle Blue stock 2 O O O O o ool 0 0 1 0 4 Schedule SE - self-employment tax Social Security Portion 0 Medicare Portion POINTS 0 0 0 0 0 Ceiling amount Less: FICA wages (enter as a positive) Net ceiling Schedule C Net income Net self-employment income ( 92.35%) Lesser of net ceiling or net self-employment income Tax rate Self-employment tax Total self-employment tax 0 0 0.124 0.029 0 Ollo POINTS 0 Self-employment tax deduction Self-employment tax Employer portion Self-employment tax deduction 0.5000 0 2 QUESTION 1 What is the Adjusted Gross Income for Beth Jordan for 2020? QUESTION 2 What is the Taxable income for Beth Jordan for 2020? QUESTION 3 What is the balance due (refund) for Beth Jordan for 2020? 46. Beth R. Jordan lives at 2322 Skyview Road, Mesa, AZ 85201. She is a tax accountant with Mesa Manufacturing Company. 1203 Western Avenue, Mesa, AZ 85201 (employer identification number 11-1111111). She also writes computer software programs for tax practitioners and has a part-time tax practice. Beth is single and has no depen- dents. Beth was born on July 4, 1974, and her Social Security number is 123-45-6785. She did not engage in any vitual currency transactions during the year, and she wants to contribute $3 to the Presidential Election Campaign Fund. Beth received the appro- priate coronavirus recovery rebates (economic impact payments): related questions in ProConnect Tax should be ignored. The following information is shown on Beth's Wage and Tax Statement (Form W-2) for 2020 Line Amount 1 2 3 4 Description Wages, tips, other compensation Federal income tax withheld Social Security wages Social Security tax withheld Medicare wages and tips Medicare tax withheld State State wages, tips, etc. State income tax withheld 5 6 $65,000.00 9,500.00 65,000.00 4,030.00 65,000.00 942.50 Arizona 65,000.00 1,954.00 15 16 17 During the year, Beth received interest of $1,300 from Arizona Federal Savings and Loan and $400 from Arizona State Bank. Each financial institution reported the inter- est income on a Form 1099-INT. She received qualified dividends $800 from Blue Corporation, $750 from Green Corporation, and $650 from Orange Corporation. Each corporation reported Beth's dividend payments on a Form 1099-DIV. Beth received a $1,100 income tax refund from the state of Arizona on April 29, 2020. On her 2019 Federal income tax return, she used the standard deduction. Fees earned from her part-time tax practice in 2020 totaled $3,800. She paid $600 to have the tax returns processed by a computerized tax return service. On February 8, 2020, Beth bought 500 shares of Gray Corporation common stock for $17.60 a share. On September 12, 2020, Beth sold the stock for $14 a share. On January 2, 2020, Beth acquired 100 shares of Blue Corporation common stock for $30 a share. She sold the stock on December 19, 2020, for $55 a share. Both stock transactions were reported to Beth on Form 1099-B; basis was not reported to the IRS. Beth bought a used sport utility vehicle for $6,000 on June 5, 2020. She purchased the vehicle from her brother-in-law, who was unemployed and was in need of cash. On November 2, 2020, she sold the vehicle to a friend for $6,500. During the year, Beth records revenues of $16,000 from the sale of a software program she developed. Beth incurred the following expenses in connection with her software development business. Cost of personal computer $7,000 Cost of printer 2,000 Furniture 3,000 Supplies 650 Fee paid to computer consultant 3,500 Beth elected to expense the maximum portion of the cost of the computer, printer, and furniture allowed under the provisions of $ 179. These items were placed in service on January 15, 2020, and used 100% in her business. CHAPTER 13 Tax Credits and Pay Although her employer suggested that Beth attend an in-person conference on current developments in corporate taxation, Beth was not reimbursed for the travel expenses of $1,420 she incurred in attending the meeting. The $1,420 included $200 for the cost of meals. During the year, Beth paid $300 for prescription medicines and $2,875 for doctor bills and hospital bills. Medical insurance premiums were paid by her employer. Beth paid real property taxes of $1,766 on her home. Interest on her home mortgage (Valley National Bank) was $3,845, and credit card interest was $320. Beth contrib- uted $2,080 in cash to various qualifying charities during the year. Professional dues and subscriptions totaled $350. Beth paid estimated taxes of $1,000. Part 1Tax Computation Compute Beth Jordan's 2020 Federal income tax payable (or refund due), and com- plete her 2020 tax return using appropriate forms and schedules. Suggested software: ProConnect Tax ENTER ALL VALUES AS POSITIVE - DEDUCTIONS AND EXCLUSIONS WILL BE AUTOMATICALLY CALCULATED AS A SUBTRACTION ENTER ALL VALUES IN BLACKBOARD AS WHOLE NUMBERS (NO PENNIES) WITHOUT A DOLLAR SIGN 2020 - Form 1040 POINTS 2020 Maried Filing Joint Single Taxable income Tax Liability $ $ $ $ Head of Household $ $ $ Maried Filing Separate $ $ 0 0.5 0 0.5 Gross Income: Salary Interest income Dividend income State income tax refund Schedule C Net Income Schedule D Net Recognized Gain (Loss) 0 0.5 0 0.5 0 Head of Household Bracket $ 14,100 First Rate 100% 12.02 5 5 4 Rate 10.07 12.07 0 $ 53.700 Maried Filing Joint Bracket $ 19.750 $ 80,250 $ 171,050 $ 326,600 $ 414.700 $ 622,050 $ 622,050 Rate 10.0% 12.02 22.07 24.0% 32.0% 35.0% Single Bracket $ 9,875 $ $ 40.125 $ 85,525 $ 163,300 $ $ 207,350 $ 518.400 $ 518,400 22.0% $ Second Third Fourth Fifth Sixth Seventh Gross Income (subtotal): 0 Maried Filing Separate Bracket Rate $ 9.875 10.07. $ 40.125 12.07. $ 85,525 22.07 $ 163,300 24.02 $ 207,350 32.0% $ 311,025 35.0% %. $ 311,025 37.0% $ 24.0% 32.0% 85,500 163,300 207,350 518,400 518,400 22.07 24.07 32.0% $ $ $ 35.0%. 37.0% 35.0% 37.0% 1 37.0% $ Deductions for AGI: Self-employment tax deduction Nonitemizer charitable contribution deduction Deductions for AGI (subtotal): OOO 1 ADJUSTED GROSS INCOME: 0 13.0 0 0 0 0 Deductions from AGI: Medical expense deduction Sales taxes deduction State income tax deduction Real estate tax deduction Mortgage interest expense deduction Credit card interest expense deduction Charitiable contribution deduction Miscellaneous itemized deductions Total Itemized Deductions 0 0 0 0 0 2 Standard Deduction 0 2 Greater of Standard or itemized 0 0 Qualified Business Income Deduction 0 0 2 2 TAXABLE INCOME: 0 6.0 0.5 1 Tax liability on dividend income Tax liability - Ordinary Income Self-employment tax Less: FIT withholding/estimates O O O O 4 0 0 1 NET BALANCE DUE (REFUND) 0 6.0 25.0 SUPPLEMENTAL SCHEDULE Schedule C POINTS 0.5 O ool 0.5 0.5 Part-time tax practice revenues Software writing business royalties Total gross income Business expenses Part-time tax practice processing fee Cost of personal computer Cost of printer Furniture Supplies Fee paid to computer consultant Total business expenses SCHEDULE C NET INCOME O O O 1 1 1 0 0.25 O ooollo 0.25 0 5 Amount Realized Adjusted Basis Gain (loss) POINTS 0 0 1 Schedule D-short-term transactions Gray stock Utility vehicle Blue stock 2 O O O O o ool 0 0 1 0 4 Schedule SE - self-employment tax Social Security Portion 0 Medicare Portion POINTS 0 0 0 0 0 Ceiling amount Less: FICA wages (enter as a positive) Net ceiling Schedule C Net income Net self-employment income ( 92.35%) Lesser of net ceiling or net self-employment income Tax rate Self-employment tax Total self-employment tax 0 0 0.124 0.029 0 Ollo POINTS 0 Self-employment tax deduction Self-employment tax Employer portion Self-employment tax deduction 0.5000 0 2
