You can use Excel, Federal Tax Forms, or Provide a Handwritten Answer to the Tax Problem, snow Work. Ralph Reed, who turned 65 in December of 2019 and his wife Mary the older woman at 67, have been married Tor 40 years. They support several family members including Ralph's parents who live down the street, two teenage giris still in high school and a son. 22. just finishing graduate school. In addition, Ralph's best friend from his college band days, who has no visible means of support although he is 55. lives with Ralph and Mary in the pool house. Ralph, though long suffering, has been paying more than 50% of their support, if not all 100%, throughout 2019, Ralph works full-time and receives a salary of $110,000. In 2019, before the Christmas break, he also received a bonus check of $10,000, which he did not deposit until January 2, 2020. Only $8,000 of Federal Income Tax was withheld from his paychecks, since they only owed $7,900 in taxes in 2018. Ralph and Mary received interest of $5,500 on several mutual funds. In addition, they received $700 of interest on Pittsburgh Stadium Bonds. After spending $2,000 in lottery tickets during the year, Mary had Bingo winnings of $1,000 in the big jackpot in December of 2019. Mary settled a lawsuit successfully and received $2,000 in compensation for injuries and $5,000 in punitive damages Ralph sold two blocks of stock held over two years. One had a gain of $2,000 and the other had a loss of $6,000. Their son, who finished graduate school in 2019, had tuition of $20,000. Ralph also has the following unreimbursed employee business expenses related to his position working for a very miserly boss: Internet connection to work from home one day per week $50/month $1,000 Books, Publications and Subscriptions to keep current in field $500 Briefcase $5,000 Continuing Education to maintain certification related to job Not Reimbursed by Employer Ralph and Mary had the following additional expenses related to itemized deductions: State and Local Tax Withheld Mortgage Interest Real Estate Taxes Charitable Contributions - Cash Medical Expenses Tax Preparation Fees $8,000 4,000 5,000 2,000 5,000 1,000 They also paid $10,000 for their parents' medical bills. Based on this information, please do the following: a. Calculate Taxable income and 2019 Federal Taxes in total and owed. b. Show the incremental and average tax rates c. Determine if they are subject to a penalty or not for underpayment of their 2019 taxes. Show all work. To insure proper credit, please supply the following pieces of information: Marital Status Gross Income items (by line on 1040 if it helps you) Deductions for AGI AGI Standard Vs Itemized Deductions Name Personal and Dependency Exemptions Taxable Income Taxes Taxes Owed or Refund Due Hint: There are a few twists to this problem, versus the practice one. However, we did discuss these items in cias These are related to the Problem: 1. There were gambling losses as well as winnings. Where are the losses reported? What are the limits? 2. They also paid $10,000 for medical expenses for their parents EXTRA CREDIT: 10 Points Identify what tax credits might be available to them? Identify the credit and the criteria. Also, what additional information would be needed to see if they qualify for the credit. You can use Excel, Federal Tax Forms, or Provide a Handwritten Answer to the Tax Problem, snow Work. Ralph Reed, who turned 65 in December of 2019 and his wife Mary the older woman at 67, have been married Tor 40 years. They support several family members including Ralph's parents who live down the street, two teenage giris still in high school and a son. 22. just finishing graduate school. In addition, Ralph's best friend from his college band days, who has no visible means of support although he is 55. lives with Ralph and Mary in the pool house. Ralph, though long suffering, has been paying more than 50% of their support, if not all 100%, throughout 2019, Ralph works full-time and receives a salary of $110,000. In 2019, before the Christmas break, he also received a bonus check of $10,000, which he did not deposit until January 2, 2020. Only $8,000 of Federal Income Tax was withheld from his paychecks, since they only owed $7,900 in taxes in 2018. Ralph and Mary received interest of $5,500 on several mutual funds. In addition, they received $700 of interest on Pittsburgh Stadium Bonds. After spending $2,000 in lottery tickets during the year, Mary had Bingo winnings of $1,000 in the big jackpot in December of 2019. Mary settled a lawsuit successfully and received $2,000 in compensation for injuries and $5,000 in punitive damages Ralph sold two blocks of stock held over two years. One had a gain of $2,000 and the other had a loss of $6,000. Their son, who finished graduate school in 2019, had tuition of $20,000. Ralph also has the following unreimbursed employee business expenses related to his position working for a very miserly boss: Internet connection to work from home one day per week $50/month $1,000 Books, Publications and Subscriptions to keep current in field $500 Briefcase $5,000 Continuing Education to maintain certification related to job Not Reimbursed by Employer Ralph and Mary had the following additional expenses related to itemized deductions: State and Local Tax Withheld Mortgage Interest Real Estate Taxes Charitable Contributions - Cash Medical Expenses Tax Preparation Fees $8,000 4,000 5,000 2,000 5,000 1,000 They also paid $10,000 for their parents' medical bills. Based on this information, please do the following: a. Calculate Taxable income and 2019 Federal Taxes in total and owed. b. Show the incremental and average tax rates c. Determine if they are subject to a penalty or not for underpayment of their 2019 taxes. Show all work. To insure proper credit, please supply the following pieces of information: Marital Status Gross Income items (by line on 1040 if it helps you) Deductions for AGI AGI Standard Vs Itemized Deductions Name Personal and Dependency Exemptions Taxable Income Taxes Taxes Owed or Refund Due Hint: There are a few twists to this problem, versus the practice one. However, we did discuss these items in cias These are related to the Problem: 1. There were gambling losses as well as winnings. Where are the losses reported? What are the limits? 2. They also paid $10,000 for medical expenses for their parents EXTRA CREDIT: 10 Points Identify what tax credits might be available to them? Identify the credit and the criteria. Also, what additional information would be needed to see if they qualify for the credit