FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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Concept explainers

Filing Federal Income Tax Return
A tax is the amount of money paid to the government on the revenue earned by the individual or business organization. It acts as an income for the government and an expense for the individual or business organization. There are different regulations rega…
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Show using correct tax forms

Problem Tim and Sarah Lawrence are married and file a joint return. Tim's Social Security number is 123-45-6789, and Sarah's Social Security number is 111-11-1111. They reside at 100 Olive Lane, Covington, LA 70434. They have two dependent children, Sean and Debra, ages 12 and 16, respectively. Sean's Social Security number is 123-45-6788, and Debra's Social Security number is 123-45-6787. Tim is a self-employed businessperson (sole proprietor of an unincorporated business), and Sarah is a corporate executive. Tim has the following income and expenses from his business in 2019. $325,000 201,000 Gross income Business expenses Records related to Sarah's employment provide the following information. Salary Unreimbursed travel expenses (including $200 of meals) $145,000 1,600 Other pertinent information for the tax year includes the following. Proceeds from sale of stock acquired on July 15, 2019 (cost of $12,000), and sold on August 1, 2019 Proceeds from sale of stock acquired on September 18, 2018 (cost of $5,000), and sold on October 5, 2019 Wages paid to full-time domestic worker for housekeeping and child supervision $9,800 3,800 10,000 7,000 27,900 31,850 20,000 Interest income received Total itemized deductions (not including any potential deductions above) Federal income tax withheld Estimated payments of Federal income tax Compute the net tax payable or refund due for Tim and Sarah Lawrence for 2019.
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Transcribed Image Text:Problem Tim and Sarah Lawrence are married and file a joint return. Tim's Social Security number is 123-45-6789, and Sarah's Social Security number is 111-11-1111. They reside at 100 Olive Lane, Covington, LA 70434. They have two dependent children, Sean and Debra, ages 12 and 16, respectively. Sean's Social Security number is 123-45-6788, and Debra's Social Security number is 123-45-6787. Tim is a self-employed businessperson (sole proprietor of an unincorporated business), and Sarah is a corporate executive. Tim has the following income and expenses from his business in 2019. $325,000 201,000 Gross income Business expenses Records related to Sarah's employment provide the following information. Salary Unreimbursed travel expenses (including $200 of meals) $145,000 1,600 Other pertinent information for the tax year includes the following. Proceeds from sale of stock acquired on July 15, 2019 (cost of $12,000), and sold on August 1, 2019 Proceeds from sale of stock acquired on September 18, 2018 (cost of $5,000), and sold on October 5, 2019 Wages paid to full-time domestic worker for housekeeping and child supervision $9,800 3,800 10,000 7,000 27,900 31,850 20,000 Interest income received Total itemized deductions (not including any potential deductions above) Federal income tax withheld Estimated payments of Federal income tax Compute the net tax payable or refund due for Tim and Sarah Lawrence for 2019.
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