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Trevor is a single individual who is a cash-method, calendar-year taxpayer. For each of the next two years (2022 and 2023), Trevor expects to
Trevor is a single individual who is a cash-method, calendar-year taxpayer. For each of the next two years (2022 and 2023), Trevor expects to report salary of $80,000, contribute $8,000 to charity, and pay $2,800 in state income taxes. Required: a. Estimate Trevor's taxable income for 2022 and 2023 using the 2022 amounts for the standard deduction for both years. b. Now assume that Trevor combines his anticipated charitable contributions for the next two years and makes the combined contribution in December of 2022. Estimate Trevor's taxable income for each of the next two years using the 2022 amounts for the standard deduction. Reconcile the total taxable income to your solution to part (a). c. Trevor plans to purchase a residence next year, and he estimates that additional property taxes and residential interest will cost $2,000 and $10,000, respectively, each year. Estimate Trevor's taxable income for each of the next two years (2022 and 2023) using the 2022 amounts for the standard deduction and also assuming Trevor makes the charitable contribution of $8,000 and state tax payments of $2,800 in each year. d. Trevor plans to purchase a residence next year, and he estimates that additional property taxes and residential interest will cost $2,000 and $10,000, respectively, each year. Assume that Trevor makes the charitable contribution for 2023 in December of 2022. Estimate Trevor's taxable income for 2022 and 2023 using the 2022 amounts for the standard deduction. Reconcile the total taxable income to your solution to part (c). Answer is complete but not entirely correct. Complete this question by entering your answers in the tabs below. Required A Required B Required C Required C Required D Estimate Trevor's taxable income for 2022 and 2023 using the 2022 amounts for the standard deduction for both years. Note: Amounts to be deducted should be indicated with a minus sign. Leave no field blank. Enter zero if applicable. 2022 2023 Salary $ Itemized deductions 80,000 $ (10,275) 80,000 (10,275) Standard deduction (12,950) (12,950) Greater of standard deduction over itemized deductions 10,275 x 10,275 x Taxable income $ 67,050 $ Total taxable income for the two years $ 67,050 134,100
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