Question
You are a CPA at a local accounting firm. Review the scenario below: Carrie and Joe are married with two children, ages 2 and 7.
You are a CPA at a local accounting firm. Review the scenario below:
Carrie and Joe are married with two children, ages 2 and 7. They both work. Carrie owns a manufacturing business, with a net income of $200,000 per year. Joe is an employee of a bank, with a salary of $100,000 per year, Federal withholding of 25%, and WV withholding of 6%. Other income consists of $5,000 from interest on their savings account.
1. What is their 2020 tax liability assuming they use the standard deduction?
2. How much in quarterly estimates for 2021 should they pay?
3. What other tax savings opportunities can we recommend?
Please provide the solutions to the questions above.
Step by Step Solution
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ANSWER 1 The term standard deduction refers to the portion of income not subject to tax that can be used to reduce your tax bill The Internal Revenue Service IRS allows you to take the standard deduct...
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Cost Accounting A Managerial Emphasis
Authors: Charles T. Horngren, Srikant M.Dater, George Foster, Madhav
13th Edition
8120335643, 136126634, 978-0136126638
