This year, Paula and Simon (married filing jointly) estimate that their tax liability will be $204,500. Last year, their total tax liability was $173,000. They estimate that their tax withholding from their employers will be $178,450. a. Are Paula and Simon required to increase their withholdings or make estimated tax payments this year to avoid the underpayment penalty? multiple choice Yes No b. By how much, if any, must Paula and Simon increase their withholding and/or estimated tax payments for the year to avoid underpayment penalties? Increasing in withholding=

This year, Paula and Simon (married filing jointly) estimate that their tax liability will be $204,500. Last year, their total tax liability was $173,000. They estimate that their tax withholding from their employers will be $178,450. a. Are Paula and Simon required to increase their withholdings or make estimated tax payments this year to avoid the underpayment penalty? multiple choice Yes No b. By how much, if any, must Paula and Simon increase their withholding and/or estimated tax payments for the year to avoid underpayment penalties? Increasing in withholding=

CONCEPTS IN FED.TAX.,2020-W/ACCESS

20th Edition

ISBN:9780357110362

Author:Murphy

Publisher:Murphy

Chapter8: Taxation Of Individuals

Section: Chapter Questions

Problem 35P

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Compute the 2019 standard deduction for the following taxpayers. a. Ellie is 15 and claimed as a dependent by her parents. She has 800 in dividends income and 1,400 in wages from a part-time job. b. Ruby and Woody are married and file a joint tax return. Ruby is age 66, and Woody is 69. Their taxable retirement income is 10,000. c. Shonda is age 68 and single. She is claimed by her daughter as a dependent. Her earned income is 500, and her interest income is 125. d. Frazier, age 55, is married but is filing a separate return. His wife itemizes her deductions.
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Bonnie is married and has one child. She owns Bonnies Rib Joint, which produces a taxable income of approximately 120,000 per year. a. Assume that Bonnies taxable income is 40,000 without considering the income from the rib joint. How much tax will she pay on the 120,000 of income from the rib joint? b. You work for the firm that prepares Bonnies tax return. Bonnie has asked the partner for whom you work to advise her on how she might lower her taxes. The partner has assigned you this task. Draft a memorandum to the partner that contains at least two options Bonnie could use to lower her taxes. For each option, explain the calculations that support the tax savings from your recommendation.
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