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Tax Optimization Mastery This activity will provide practical insights into tax optimization, demonstrating the importance of the 6 2 5 1 form for individuals with

 

Tax Optimization Mastery

This activity will provide practical insights into tax optimization, demonstrating the importance of the 6251 form for individuals with specific income streams and deductions under the tax law.

Instructions:

Analyze the following information and complete the task:

Bruce Ellis, a 34-year-old businessman, navigated a dynamic financial landscape in 2022 with the following transactions:

Transaction Amount ($)

Sales 515,000.00

Purchase 185,500.00

Ending Inventory 130,750.00

Beginning Inventory 165,000.00

Expenses:

Expense Category Amount ($)

Salaries 19,200.00

Payroll Expenses 7,790.00

Repair & Maintenance 4,860.00

Insurance Expenses 7,080.00

Rent Expense 48,500.00

Utilities Expenses 14,380.00

Advertising Expenses 29,300.00

Professional Fee Expenses 48,900.00

Additional Information:

In 2022, Bruce made estimated payments of $51,375 and contributed $9,150 for Social Security.

His wife, aged 33, earned $75,500 with $6,550 withheld for income tax.

Both Bruce and his wife opened an IRA account, contributing $6,000 each.

Your task is to complete the 1040 form, Schedule C, and the 6251 form based on this financial data.

Step by Step Solution

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Step: 1

To optimize Bruce Elliss taxes we can consider several strategies based on the information provided 1 Business Expenses Deductions Bruce can deduct business expenses such as salaries payroll expenses ... blur-text-image

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