This is the tenth Capstone project installment as outlined in Module A located in the Learning Modules section. The purpose of this installment is to determine the amounts to include in and exclude from income for income tax purposes, determine the amount of tax refund or amount due to the IRS, and to identify strategles to reduce income taxes. You will assume that the following facts (in alphabetical order) represent your income tax related activity as a single filer in your Capstone lifestyle: Category Amount Bank interest income received $500 Car pool income received $150 Charitable contributions paid $2.500 Inheritance from relative received $10,000 Juror fee received $200 Life insurance beneficiary amount received $1,100 Mortgage interest paid $4,500 Municipal bond interest received $800 Personal property taxes paid (license tabs) $175 Property tax payments (residence) $2.900 Standard Deduction - Single taxpayer $12,000 State of Michigan income taxes paid see Form W-2. box 17 State of Michigan unemployment received $1,300 Wages download W-2 form a Employee's social security number This information is being furnished to the Internal Revenue Service. If you 123-00-0000 are required to file a tax retum, a negligence penalty or other sanction OMB No. 1545-0008 may be imposed on you if the income is taxable and you fail to report it b Employer identification number (EIN) 1 Wages, tips, other compensation 2 Federal income tax withheld 38-000000 65,000.00 9, 103.00 c Employer's name, address, and ZIP code 3 Social security wages 4 Social security tax withheld Capstone Project Employer 65,000.00 4,030.00 18600 School Road 5 Medicare wages and tips 6 Medicare tax withheld 65,000.00 942.00 Livonia 7 Social security tips 8 Alocated tips MI 48152 734-462-4400 10 Dependent care benefits d Control number 123456 . Employee's first name and initial Business 204 12345 Radelier Street Last name Suff. 11 Nonqualified plans 12a See instructions for box 12 Student 13 12b HORRY 14 Other 12c Garden City MI 40135 120 Employee's address and ZIP code 15 Employer's state ID number MI 30-00000 10 Stowagosto 65,000.00 10 Local wages, ofc 19 Local income tax 17 State income tax 2,925.00 20 Locale Form W-2 Wage and Tax Statement Copy C-For EMPLOYEE'S RECORDS Department of the Treasury - Internal Revenue Service Safe, accurate, FASTI Uso ne-file Requirements: 1. Compute the amount of income refund or amount owed and show all of your work. When viewing the example in the book, note that as indicated in the first page of this module, step 5 of the "8 Steps in Calculating Your Income Taxes" is no longer in effect based on 2018 tax reform. This means that there is no personal exemption to subtract in determining taxable income. You will only subtract the greater of the standard deduction or the total for your itemized deductions from the amount of taxable income. Once you have determined taxable income, use the following partial tax table to determine the total amount of tax liability. (20 points) Single filer taxable income is: At least But less Your than tax is $52,500 $53,000 $7,520 $53,000 $53,500 $7,620 $53,500 $54,000 $7,720 $54,000 $54,500 $7,820 $54,500 $55,000 $7.920 2. Identify at least two strategies that you could utilize to reduce your income taxes. It is assumed that you do not currently practice any type of income tax planning, so you can "think outside of the box" when answering this question. (5 points) This is the tenth Capstone project installment as outlined in Module A located in the Learning Modules section. The purpose of this installment is to determine the amounts to include in and exclude from income for income tax purposes, determine the amount of tax refund or amount due to the IRS, and to identify strategles to reduce income taxes. You will assume that the following facts (in alphabetical order) represent your income tax related activity as a single filer in your Capstone lifestyle: Category Amount Bank interest income received $500 Car pool income received $150 Charitable contributions paid $2.500 Inheritance from relative received $10,000 Juror fee received $200 Life insurance beneficiary amount received $1,100 Mortgage interest paid $4,500 Municipal bond interest received $800 Personal property taxes paid (license tabs) $175 Property tax payments (residence) $2.900 Standard Deduction - Single taxpayer $12,000 State of Michigan income taxes paid see Form W-2. box 17 State of Michigan unemployment received $1,300 Wages download W-2 form a Employee's social security number This information is being furnished to the Internal Revenue Service. If you 123-00-0000 are required to file a tax retum, a negligence penalty or other sanction OMB No. 1545-0008 may be imposed on you if the income is taxable and you fail to report it b Employer identification number (EIN) 1 Wages, tips, other compensation 2 Federal income tax withheld 38-000000 65,000.00 9, 103.00 c Employer's name, address, and ZIP code 3 Social security wages 4 Social security tax withheld Capstone Project Employer 65,000.00 4,030.00 18600 School Road 5 Medicare wages and tips 6 Medicare tax withheld 65,000.00 942.00 Livonia 7 Social security tips 8 Alocated tips MI 48152 734-462-4400 10 Dependent care benefits d Control number 123456 . Employee's first name and initial Business 204 12345 Radelier Street Last name Suff. 11 Nonqualified plans 12a See instructions for box 12 Student 13 12b HORRY 14 Other 12c Garden City MI 40135 120 Employee's address and ZIP code 15 Employer's state ID number MI 30-00000 10 Stowagosto 65,000.00 10 Local wages, ofc 19 Local income tax 17 State income tax 2,925.00 20 Locale Form W-2 Wage and Tax Statement Copy C-For EMPLOYEE'S RECORDS Department of the Treasury - Internal Revenue Service Safe, accurate, FASTI Uso ne-file Requirements: 1. Compute the amount of income refund or amount owed and show all of your work. When viewing the example in the book, note that as indicated in the first page of this module, step 5 of the "8 Steps in Calculating Your Income Taxes" is no longer in effect based on 2018 tax reform. This means that there is no personal exemption to subtract in determining taxable income. You will only subtract the greater of the standard deduction or the total for your itemized deductions from the amount of taxable income. Once you have determined taxable income, use the following partial tax table to determine the total amount of tax liability. (20 points) Single filer taxable income is: At least But less Your than tax is $52,500 $53,000 $7,520 $53,000 $53,500 $7,620 $53,500 $54,000 $7,720 $54,000 $54,500 $7,820 $54,500 $55,000 $7.920 2. Identify at least two strategies that you could utilize to reduce your income taxes. It is assumed that you do not currently practice any type of income tax planning, so you can "think outside of the box" when answering this question. (5 points)
