Question
Steve(age 40) andEdie(age 39)Bradyare married.Steveworks as a retailmanager andEdieis a self-employedarchitectbut does not maintain a home office.She does NOT qualify for the Qualified BusinessIncome (QBI)
Steve(age 40) andEdie(age 39)Bradyare married.Steveworks as a retailmanager andEdieis a self-employedarchitectbut does not maintain a home office.She does NOT qualify for the Qualified BusinessIncome (QBI) deduction.Their2019tax and other informationare as follows:
Salary -Steve
70,000
Federal withholding on salary
10,000
State withholding on salary
4,000
Interest income onmunicipalbonds:
State of Connecticut
1,000
Savings account interest
1,500
Dividends fromRGR, Inc. (all are non-qualified)
2,500
Value of employer provided medical insurance
3,000
Inheritance fromSteve'sfather's estate
9,000
Interest paid on personal car loan
1,800
Interest paid on personal loan
1,100
Child supportpaid toSteve'sex-wife
10,000
Alimonypaid toSteve'sex-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 (<$1M)
4,000
Edie's business revenues
58,000
Edie'sbusiness expenses
25,000
Required:Using the tax formula format, determine thefollowing for theBrady's2019tax year(show all calculations):
a.All Income$___________
b.Exclusions (if any)$___________
c.Gross income (includingEdie'sSE income)$___________
d.Deductions For AGI$___________
e.Adjusted gross income$___________
f.Itemized deduction or standard deduction amount$___________
g.Deduction for exemptions$___________
h.Taxable income$___________
i.Income tax liability$___________
j.Self-employment tax liability$___________
k.Net tax dueor refund (show calculation)$___________
Remember:This is for the 2019tax year.You must use appropriate 2019amounts for standard deduction, exemptions, and tax calculations.
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