Suppose Marley took advantage of the relief that was available to small business owners during the COVID-19 pandemic and received a Paycheck Protection Program (PPP) loan in the amount of $5,000. What impact would this have on her 2020 tax return?
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Suppose Marley took advantage of the relief that was available to small business owners during the COVID-19 pandemic and received a Paycheck Protection Program (PPP) loan in the amount of $5,000. What impact would this have on her 2020 tax return?
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- . Amelia and Addison are your grandparents. Amelia and Addison asked you to help them with their tax return in 2020. Below is a few financial info that they provide you: · Both Amelia and Addison's main source of income is from their rental house. In 2020, they earned $48,000 in total from their rental properties. · In the middle of 2020, Addison had a heart attack and must go to the emergency room. The total medical cost that Addison paid out of pocket was $5000 · Knowing that her dad had a bad accident, Alice came over to visit and gave the old couple a $10,000 check in September 2020. The couple did not immediately cash in the check but plan to only cash it in January 2021. Amelia told you that she hopes that by doing so, she would not have to recognize the amount in 2020. · Amelia and Addison paid $24,000 in total on their Texas property tax in 2020 · On their Vegas trip in early 2020, Amelia played Blackjack and won $2000. However, Addison was not that…Nadine’s mom and dad are not financially literate, and so Nadine would like you to assist her parents with their situation: Her parents want to know how they can minimize their income tax cost for the current year 2021? What is the maximum tax that can be saved? Here is what her parents’ situation looks like: They are a married couple currently 68 years of age and retired. They have the following incomes for the current year: Dad Mom CPP $9,600 $4,800 OAS $7,400 $7,400 DB Pension $68,200 N/A RRIF N/A $8,000 Assume that their marginal tax rates are to be 20% up to $ 49,030 and on income between $49 000 and $97,000 assume 30%. Once again, they want to know how they can minimize their income tax cost for the current year 2020? What is the maximum tax that can be saved?Jana just found out that she is going to receive an end-of-year bonus of $54,000. She is in the 35 percent marginal tax bracket. Calculate her income tax on this bonus. Now assume that instead of receiving a bonus, Jana receives the $54,000 as a long-term capital gain. What will be her tax? Which form of compensation offers Jana the best after-tax return? Would your calculation be different if the gain was short-term rather than long-term? Her income tax on this bonus is?
- Jana just found out that she is going to receive an end-of-year bonus of $40,000. She is in the 35 percent marginal tax bracket. Calculate her income tax on this bonus. Now assume that instead of receiving a bonus, Jana receives the $40,000 as a long-term capital gain. What will be her tax? Which form of compensation offers Jana the best after-tax return? Would your calculation be different if the gain was short-term rather than long-term? Give typing answer with explanation and conclusionReview the following scenario. Use the information provided to answer questions about the taxpayer’s 2020 return.Evonne Williams (32) is filing as a single taxpayer. Evonne was the beneficiary of one of her great-grandmother’s traditional IRAs. She passed away during the year, and Evonne took a $2,000 total distribution from the IRA. She then used the money to pay down her credit card debt.Evonne did not qualify for any COVID-19 related exceptions for IRA distributions. As far as she knows, all of her great-grandmother’s contributions to the account were deductible.Evonne’s only other income during the year was $44,000 in wages. She will claim the standard deduction. Question 1. Evonne received the following Form 1099-R reporting the IRA distribution. The form shows a code "4" in box 7, indicating that the distribution is due to death. When Evonne files her 2020 return, how much of the distribution must she include in her total income? $0 $200 $1,800 $2,000Your client has an adjusted gross income this year of $40,000. She would like to reduce her income taxes. She plans to contribute $20,000 during the year to the American Cancer Society, a qualified public charity. To maximize the current year income tax deduction, which of the following is the most appropriate property for the client to transfer to the charity? A)Some stock, held short term, valued at $20,000 with a basis of $8,000 B)A stamp collection, held long term, valued at $20,000 with a basis of $9,000, which the American Cancer Society will dispose of upon receipt C)A life insurance policy, with a replacement cost of $20,000, on which she has paid net premiums of $5,500 D)An interest in a parcel of commercial real estate, held long term, with a fair market value of $20,000 and a basis of $15,000
- Your client has an adjusted gross income this year of $40,000. She would like to reduce her income taxes. She plans to contribute $20,000 during the year to the American Cancer Society, a qualified public charity. To maximize the current year income tax deduction, which of the following is the most appropriate property for the client to transfer to the charity? A)Some stock, held short term, valued at $20,000 with a basis of $8,000 B)A stamp collection, held long term, valued at $20,000 with a basis of $9,000, which the American Cancer Society will dispose of upon receipt C)A life insurance policy, with a replacement cost of $20,000, on which she has paid net premiums of $5,500 D)An interest in a parcel of commercial real estate, held long term, with a fair market value of $20,000 and a basis of $15,000 Correct answer.Charlie's Green Lawn Care is a cash basis taxpayer. Charlie the sole proprietor, is considering delaying some of his December 2019 customer billings for lawn care into the next year. In addition, he is thinking about paying some of the bills in late December 2019,l which he would ordinarily pay in January 2020. Charlie claims he will have less income and more expenses, thereby paying less tax!. Is Charlie's way of thinking acceptable?On January 1, 2020, Michelle, age 35, started a new job, and her new employer offers a healthcare flexible spending account (FSA). Michelle decided to contribute the maximum amount to her healthcare FSA. In 2020, Michelle is in the 32% marginal tax bracket. What is Michelle’s tax benefit (tax savings) as a result of her FSA contributions? Assume that Michelle spends all of her healthcare FSA funds on eligible medical expenses.
- Kim earned $30,000 from Pfizer before she was laid off. She then collected $7,000 of unemployment benefits. Finally, Kim received a $12,500 scholarship for tuition so she could return to college to earn a microbiology degree. How much does Kim need to report as income on her tax return?Answer the following a. If Kathleen receives a $17,000 distribution from her traditional 401(k) account, how much will she be able to keep after paying taxes and penalties, if any, on the distribution? b. If Kathleen receives a $17,000 distribution from her Roth 401(k) account, how much will she be able to keep after paying taxes and penalties, if any, on the distribution? c. If Kathleen retires from MH and then receives a $17,000 distribution from her traditional 401(k), how much will she be able to keep after paying taxes and penalties, if any, on the distribution?Kennedy had a very busy 2022 as she graduated with a master in public health in May and began work in July. She has asked you for help with her 2022 tax return. For each item, indicate whether: (i) the item would be recognized in gross income this year, (ii) the item would be excluded or deferred from gross income this year, or (ii) more information is needed. Kennedy sold a condo for $150,000 which she purchased for $130,000 five years ago. She did not live in the condo at any point. Multiple Choice Included. More information is needed Excluded or Deferred