Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Read through the following items and determine what the taxable income is. For any amount that is not taxable or tax deductible explain why it

Read through the following items and determine what the taxable income is. For any amount that is not taxable or tax deductible explain why it is not. Enter your answers in the shaded boxes. Examples follow: Taxable Income FOR AGI Deductions FROM AGI Deductions Explanation for anything excluded
Example: Jesse earned $100 of savings account interest and $500 from child support. $ 100 $500 child support is excluded from income
Example: Jesse had $100 of credit card interest and $1,000 of mortgage interest $ (1,000) $100 credit card interest is not deductible
Example: Jessie had $3,000 of Schedule C business expenses and $1,500 of hobby expenses $ (3,000) Hobby expenses are not deductible
To my friendly student tax preparer:
Hello, my name is Shady Slim. I understand you are going to help me figure out my gross income for the year ... whatever that means (USE 2020 RULES and assume Shady files as a single person). Its been a busy year and Im a busy man, so let me give you the lowdown on my life and you can do your thing.
Taxable Income FOR AGI Deductions FROM AGI Deductions Explanation for anything excluded
a. I was unemployed at the beginning of the year and got $5,000 in unemployment compensation. I later got a job as a manager for Roca Cola. I earned $61,500 in base salary this year. My boss gave me a $2,500 Christmas bonus check on December 22. I decided to hold on to that check and not cash it until next year, so I wont have to pay taxes on it this year. Pretty smart, huh? My jobs pretty cool. I get a lot of fringe benefits like a membership to the gym that costs $1,800 a year and all the Roca Cola I can drink, although I cant really drink a whole lotI figure $40 worth this year.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Creative Accounting, Fraud And International Accounting Scandals

Authors: Michael J. Jones

1st Edition

0470057653, 9780470057650

More Books

Students also viewed these Accounting questions

Question

What is job analysis and how does it relate to job descriptions?

Answered: 1 week ago