Question
Steven (age 40) and Lori (age 39) Post are married. Lori works as a retail manager and Steven is a self-employed architect (he does not
Steven (age 40) and Lori (age 39) Post are married. Lori works as a retail manager and Steven is a self-employed architect (he does not qualify for the QBI Deduction) and does not maintain a home office. Their 2020 tax and other information are as follows:
Salary Lori $90,000
Federal income tax withholding on salary $18,000
CT State Income Tax withholding on salary $ 6,000
CT Municipal bond interest $ 2,000
Savings account interest $ 1,500
Inheritance from Stevens fathers estate $ 7,000
Dividends from RGR, Inc (all are non-qualified) $ 4,000
Interest paid on Loriss personal car loan $ 2,000
Child support paid to Stevens ex-wife $10,000
Alimony paid to Stevens ex-wife. Divorced in 2010 $ 6,000
Qualified Out of Pocket Medical Expenses $ 5,000
Donations to Church $ 2,500
Real Estate Taxes on primary residence $ 5,000
Mortgage interest paid on primary residence (<$1M) $ 8,000
Stevens business revenue $60,000
Stevens business expenses $15,000
Required: Using the tax formula format, determine the following for the Posts 2020 tax year (show all calculations):
- All Income $___________
- Income Exclusions (if any) $ ___________
- Gross income (including Steves SE profit) $ ___________
- Deductions For AGI $ ___________
- Adjusted gross income $ ___________
- Itemized deduction or standard deduction amount $ ___________
- Qualified Business Deduction $ ___________
- Taxable income $ ___________
- Income tax liability $ ___________
- Self-employment tax liability $ ___________
- Net tax due or refund (show calculation) $ ___________
Remember: This is for the 2020 tax year. You must use appropriate 2020 amounts for standard deduction, exemptions, and tax calculations. You are not required to use tax forms. SHOW ALL CALCULATIONS
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started