QUESTION 2 Hello, my name is Hagrid. Thanks for volunteering to help me with my taxes for this year. My business manager says we should start with my Gross Income - whatever that means. I have had a pretty good year so I am exeited to see what my tax return looks like I got a promotion to chief inquisitor for Ollivander Inc in January. I earned $55,000 in base salary this year. I get a lot of fringe benefits like all the free wands and butterbeer I want. As part of my chief duties, I get to decide on certain things like new plans for the company. My good buddy, Gellert, runs an advertising and design company. I made sure that he won the new logo design contract for the new packaging for Ollivander wands for this year (even though his offer wasn't quite the best) Gellert bought me a gift of a used Quidditch Broom this year for being such a good friend. The broom cost $45,000. My Great Uncle, Voldemort died this year. He was my favorite uncle (he was my only uncle). He left me $550,000 in cash and $40,000 worth of stock in his will. I invested some of the cash in stocks and bonds and put the rest into my savings account. As a result, I received S4,500 in dividends from the stock, $1,500 in interest from the municipal bonds, and S4,500 in interest from my savings account. I did have another bit of bad news this year, my boss told me on December 8 that they were laying me off from the company. They gave me a $22,000 severance check on December 15. I decided to hold on to that check and not cash it until next year, so I won't have to pay taxes on it this year Pretty smart, huh? And I was able to collect $2,550 in unemployment compensation. Here's another bit of good luck for the year. I purchased a new Sorting Hat at a local resale store. When I was putting it in my office I found an envelope with $9,000 inside. What a great day I also like to gamble a lot. I won S14,000 in a Snitch tournament in Diagon Alley this year. I also won about S3,000 over the year at our Friday night poker game. Unfortunately, I lost $4,000 in the office Hogwarts pool and another $9,500 on my fantasy Quidditch league. Still my winnings were better than my losing Finally, my ex-wife, Maxine, is still paying me alimony. She's a teacher who divorced me in 2015 because I was not working at the time -a short visit to Azkaban. Since she was making Finally, my ex-wife, Maxine, is still paying me alimony. She's a teacher who divorced me in 2015 because I was not working at the time a short visit to Azkaban. Since she was making so much money, and I was unemployed at the time, the judge ruled that she had to pay ME alimony. She sent me $8,000 in alimony payments this year. She must still kind of like me, though. She sent me a check for $975 for Christmas this year I forgot to get her anything, though. Thanks for all your help - can't wait to see what you come up with Gross Income Use the table below to show what you did and did not include in Gross Income and your explanation. Feel free to add additional rows if necessary Item Amount Explanation Appendix Tax Rates 2019 Tax Rate Schedules Individuals Sichedule Z-Head of Household Schedule X-Single If taxable If taxable income is But not But not income is The tax is The tax is: over over over over 0 $13,850 10 % of taxable income $1.385 plus 12 % of the excess S9,700 10 % of taxable income 39,475 $970 plus 12% of the excess over $9,700 $ 84,200 $4,543 plus 22 % of the excess 0 s 52,850 S 13.850 S 9,700 over $13,850 $ 52,850 $6,065 plus 22% of the excess over $52,850 $12,962 plus 24% of the excess over $84,200 $31,322 plus 32% of the excess $ 39,475 $84,200 over $39,475 $14,382.50 plus 24 % of the excess $84,200 S160.700 $ 84,200 $160,725 over $84,200 $32,748.50 plus 32% of the excess $204.100 $160,700 $160,725 $204,100 over $160,700 $45,210 plus 35% of the excess over $204,100 over $160,725 $46,628.50 plus 35 % of the excess $510,300 $204,100 $204,100 $510,300 over $204,100 $153,798.50 plus 37% of the excess over $510,300 $510.300 $152,380 plus 37% of the excess $510,300 over $510,300 Schedule Y-2-Married Filing Separately Schedule Y-1-Mlarried Filing Jointly or Qualifying Widow(er) If taxable income is But not If taxable The tax is: ever over income is But not The tax is aver: over 0 S 9,700 s 9,700 39.475 10% of taxable income $970 plus 12 % of the excess 10 % of taxable income $1,940 plus 12 % of the excess S 0SI19,400 S 19,400 78.950 over 59,700 $4543 plus 22% of the excess over $39,475 $14,382.50 plus 24 % of the excess over $84,200 $32,748.50 plus 32 % of the excess over $160,725 $46,628.50 plus 35% of the excess over $204,100 s82,354.75 plus 37% of the excess over $306,175 s 84,200 S 39,475 over $19,400 $9.086 plus 22% of the excess over $78,950 $28,765 plus 24% of the excess $ 78,950 $168,400 $ 84,200 $160,725 $168,400 $321,450 $160,725 $204,100 over $168,400 $65,497 plus 32 % of the excess over $321,450 $321,450 $408.200 $306,175 $204,100 $612,350 $93,257 plus 35% of the excess $408,200 $306,175 over $408,200 S164,709.50 plus 37 % of the excess over $612.350 $612,350 D-2 Appendix D Estates and Trusts If tavalble income is But aot The tax is aver over s o S 2,600 S 2,600 10% of taxable income $260 plus 24% of the excess 9,300 over $2,600 $1.868 plus 35 % of the excess $ 9,300 $12.750 over $9,300 $3,075.50 plus 37% of the excess over $12,750 $12,750 Tax Rates for Net Capital Gains and Qualified Dividends Rate Taxable Income Married Filing Separately Married Head of Trusts Filing Jointly Single Household and Estates s0-$39,375 so-$39,375 so-$52,750 s0-$2,650 $2,651 $12,950 0% $0-$78,750 $78.751 $488,850 $39.376-$244,425 $39,376-$434,550 $434,551+ $52,751 $461,700 20% $488.851+ $244,426+ $461,701+ $12,951+ This rate applies to the net capital gains and qualified dividends that fall within the range of taxable income specified in the table (net capital gains and qualified divi dends are incleded in taxable income last for this purpose). Basic Standard Deduction Amounts Amount of Each Additional Standard Deduction for Taxpayers Who Are Age 65 or Blind 2018 2019 2019 2018 Filing Status Amount Amount Amount Amount Married Filing Jointly Qualifying Widow or Widower Married Filing Separately Head of Household Single $24,000 $24,400 Married taxpayers S1,300 $1,300 $24,400 S12.200 $24,000 Single taxpayer or head of household $1,650 $1.600 S12.000 $18,000 $18.350 S12,000 $12.200 Exemption Amount For individuals claimed as a dependent on another return, the 2019 sandard dedection is the greater of (1) S1,100 or (2) $350 plus earned 2019 2018 income not to exceed the standard deduction amount of those who are $4,150 $4.200 not dependents. Used for qualifying relative gross income tes. Corporations Rate Taxable Income 21% All QUESTION 2 Hello, my name is Hagrid. Thanks for volunteering to help me with my taxes for this year. My business manager says we should start with my Gross Income - whatever that means. I have had a pretty good year so I am exeited to see what my tax return looks like I got a promotion to chief inquisitor for Ollivander Inc in January. I earned $55,000 in base salary this year. I get a lot of fringe benefits like all the free wands and butterbeer I want. As part of my chief duties, I get to decide on certain things like new plans for the company. My good buddy, Gellert, runs an advertising and design company. I made sure that he won the new logo design contract for the new packaging for Ollivander wands for this year (even though his offer wasn't quite the best) Gellert bought me a gift of a used Quidditch Broom this year for being such a good friend. The broom cost $45,000. My Great Uncle, Voldemort died this year. He was my favorite uncle (he was my only uncle). He left me $550,000 in cash and $40,000 worth of stock in his will. I invested some of the cash in stocks and bonds and put the rest into my savings account. As a result, I received S4,500 in dividends from the stock, $1,500 in interest from the municipal bonds, and S4,500 in interest from my savings account. I did have another bit of bad news this year, my boss told me on December 8 that they were laying me off from the company. They gave me a $22,000 severance check on December 15. I decided to hold on to that check and not cash it until next year, so I won't have to pay taxes on it this year Pretty smart, huh? And I was able to collect $2,550 in unemployment compensation. Here's another bit of good luck for the year. I purchased a new Sorting Hat at a local resale store. When I was putting it in my office I found an envelope with $9,000 inside. What a great day I also like to gamble a lot. I won S14,000 in a Snitch tournament in Diagon Alley this year. I also won about S3,000 over the year at our Friday night poker game. Unfortunately, I lost $4,000 in the office Hogwarts pool and another $9,500 on my fantasy Quidditch league. Still my winnings were better than my losing Finally, my ex-wife, Maxine, is still paying me alimony. She's a teacher who divorced me in 2015 because I was not working at the time -a short visit to Azkaban. Since she was making Finally, my ex-wife, Maxine, is still paying me alimony. She's a teacher who divorced me in 2015 because I was not working at the time a short visit to Azkaban. Since she was making so much money, and I was unemployed at the time, the judge ruled that she had to pay ME alimony. She sent me $8,000 in alimony payments this year. She must still kind of like me, though. She sent me a check for $975 for Christmas this year I forgot to get her anything, though. Thanks for all your help - can't wait to see what you come up with Gross Income Use the table below to show what you did and did not include in Gross Income and your explanation. Feel free to add additional rows if necessary Item Amount Explanation Appendix Tax Rates 2019 Tax Rate Schedules Individuals Sichedule Z-Head of Household Schedule X-Single If taxable If taxable income is But not But not income is The tax is The tax is: over over over over 0 $13,850 10 % of taxable income $1.385 plus 12 % of the excess S9,700 10 % of taxable income 39,475 $970 plus 12% of the excess over $9,700 $ 84,200 $4,543 plus 22 % of the excess 0 s 52,850 S 13.850 S 9,700 over $13,850 $ 52,850 $6,065 plus 22% of the excess over $52,850 $12,962 plus 24% of the excess over $84,200 $31,322 plus 32% of the excess $ 39,475 $84,200 over $39,475 $14,382.50 plus 24 % of the excess $84,200 S160.700 $ 84,200 $160,725 over $84,200 $32,748.50 plus 32% of the excess $204.100 $160,700 $160,725 $204,100 over $160,700 $45,210 plus 35% of the excess over $204,100 over $160,725 $46,628.50 plus 35 % of the excess $510,300 $204,100 $204,100 $510,300 over $204,100 $153,798.50 plus 37% of the excess over $510,300 $510.300 $152,380 plus 37% of the excess $510,300 over $510,300 Schedule Y-2-Married Filing Separately Schedule Y-1-Mlarried Filing Jointly or Qualifying Widow(er) If taxable income is But not If taxable The tax is: ever over income is But not The tax is aver: over 0 S 9,700 s 9,700 39.475 10% of taxable income $970 plus 12 % of the excess 10 % of taxable income $1,940 plus 12 % of the excess S 0SI19,400 S 19,400 78.950 over 59,700 $4543 plus 22% of the excess over $39,475 $14,382.50 plus 24 % of the excess over $84,200 $32,748.50 plus 32 % of the excess over $160,725 $46,628.50 plus 35% of the excess over $204,100 s82,354.75 plus 37% of the excess over $306,175 s 84,200 S 39,475 over $19,400 $9.086 plus 22% of the excess over $78,950 $28,765 plus 24% of the excess $ 78,950 $168,400 $ 84,200 $160,725 $168,400 $321,450 $160,725 $204,100 over $168,400 $65,497 plus 32 % of the excess over $321,450 $321,450 $408.200 $306,175 $204,100 $612,350 $93,257 plus 35% of the excess $408,200 $306,175 over $408,200 S164,709.50 plus 37 % of the excess over $612.350 $612,350 D-2 Appendix D Estates and Trusts If tavalble income is But aot The tax is aver over s o S 2,600 S 2,600 10% of taxable income $260 plus 24% of the excess 9,300 over $2,600 $1.868 plus 35 % of the excess $ 9,300 $12.750 over $9,300 $3,075.50 plus 37% of the excess over $12,750 $12,750 Tax Rates for Net Capital Gains and Qualified Dividends Rate Taxable Income Married Filing Separately Married Head of Trusts Filing Jointly Single Household and Estates s0-$39,375 so-$39,375 so-$52,750 s0-$2,650 $2,651 $12,950 0% $0-$78,750 $78.751 $488,850 $39.376-$244,425 $39,376-$434,550 $434,551+ $52,751 $461,700 20% $488.851+ $244,426+ $461,701+ $12,951+ This rate applies to the net capital gains and qualified dividends that fall within the range of taxable income specified in the table (net capital gains and qualified divi dends are incleded in taxable income last for this purpose). Basic Standard Deduction Amounts Amount of Each Additional Standard Deduction for Taxpayers Who Are Age 65 or Blind 2018 2019 2019 2018 Filing Status Amount Amount Amount Amount Married Filing Jointly Qualifying Widow or Widower Married Filing Separately Head of Household Single $24,000 $24,400 Married taxpayers S1,300 $1,300 $24,400 S12.200 $24,000 Single taxpayer or head of household $1,650 $1.600 S12.000 $18,000 $18.350 S12,000 $12.200 Exemption Amount For individuals claimed as a dependent on another return, the 2019 sandard dedection is the greater of (1) S1,100 or (2) $350 plus earned 2019 2018 income not to exceed the standard deduction amount of those who are $4,150 $4.200 not dependents. Used for qualifying relative gross income tes. Corporations Rate Taxable Income 21% All