You interviewed a new client and these were the facts provided. Provide them with a brief explanation of taxreason for each Jerry was injured playing football and his parents paid for the physical therapy that cost them $4000 above what the health insurance paid, braces for Julie for the final year cost $2200. The parents have 2health insurance plans, Stacy from her employer paid plan that covers her and the children. Charles has a self-emploved insurance plan that he pays $9000 a vear through his business.

Certainly, here's a breakdown of the potential tax reasons Jerry and Julie's medical expenses might…

Answered: You interviewed a new client and these…

Individual Income Taxes

43rd Edition

ISBN:9780357109731

Author:Hoffman

Publisher:Hoffman

Chapter19: Deferred Compensation

Section: Chapter Questions

Problem 56P

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Tom and Ashley have a daughter, Janice, who is 19-years-old and attending college as asophomore at a local public university. Her parents have the following expense with relations toher college: •$20,000 for annual college tuition •$500 in required fees for attending courses •$8,500 for room and board Using the above information, you have been asked to calculate their best option for an education deduction or tax credit. Tom and Ashley, make $115,000 per year. Among the three options for education tax benefit, show calculations for which one would be the best for them and what is the deduction/credit?
Martin and Rachel are married and have a 3-year-old child. Martin is going to medical school full-time for 12 months of the year and Rachel earns $45,000. Their child is in day care so Martin can go to school while Rachel is at work. The cost of their day care is $10,000. What is their child and dependent care credit? Please show your calculations.
You and your spouse have the following retirement accounts. Tell me how much you can take out or borrow from each account without incurring a tax penalty. Assume that you are a first time home buyer and you are in the 17% Federal and state tax brackets. Your IRA $9,000 Your Spouse's IRA $8,000 Your Roth IRA $18,000 (10,000 of contributions) Your Spouse's Roth $15,000 (8,500 of contributions) Your 401(k) $110,000 Based on the information above, answer the following questions: * number your answers 1,2,3 1) How much can you take out or borrow without penalty for a down payment? 2) What is the maximum amount you can pay for a house if you put 20% down. Assume that you can borrow any amount.
. 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…
Leslie graduated with her bachelor's degree in Accounting. She works for a CPA firm that pays her tuition ($8,150 per year) for her so that she can receive her MBA. How much of the $8,150 tuition benefit does Leslie need to include in her income?
Your client, Karna, has asked you for some advice. He would like to know how much he can contribute to his RRSP in the current year without over contributing. Karna has a carry forward amount of $16,000 and a pension adjustment of $6,000 from the previous year. In addition Karna has been divorced for the past three years and pays $2,500 per month in alimony. Given this scenario and based on the financial information below, how much can Karna contribute this year? Base Salary Commission Bonus Investment Portfolio Capital Gains Dividends $5,000 $6,000 Total taxable income $136,000 Select one: Current Year Previous Year $85,000 $80,000 $25,000 $30,000 $15,000 $18,000 a. $29,080 b. $27,100 c. $27,640 d. $29,260 $4,000 $5,000 $137,000
Julie paid a day care center to watch her two-year-old son while she worked as a computer programmer for a local start-up company. What amount of child and dependent care credit can Julie claim in 2021 in each of the following alternative scenarios? a. Julie paid $2,000 to the day care center and her AGI is $50,000 (all salary). b. Julie paid $10,000 to the day care center and her AGI is $50,000 (all salary). c. Julie paid $4,000 to the day care center and her AGI is $127,000 (all salary). d. Julie paid $2,000 to the day care center and her AGI is $402,000 (all salary). e. Julie paid $4,000 to the day care center and her AGI is $14,000 ($2,000 salary and $12,000 unearned income).
Steve is the librarian in his city's library. The library provides group disability insurance where premiums are paid by employees with after-tax dollars. He enrolls in a policy through the employer that provides a benefit of $4,200 a month. If he is in the 25% tax bracket and is disabled, what are his benefits after tax? A) $0. B) $1,050. C) $3,150. D) $4,200.
A taxpayer would be required to pay Social Security and Medicare taxes for a domestic employee in all but one of the following situations. In which situation would this not be required? a.A cook who is paid $35,000 a year b.A nanny who earns $22,000 a year c.A baby-sitter who earns $1,300 a year d.A cleaning lady who is paid $8,000 a year e.The taxpayer would not have to pay Social Security and Medicare taxes in any of the above situations.
Darrell is an employee of Whitneys. During the current year, Darrells salary is 136,000. Whitneys net self-employment income is also 136,000. Calculate the Social Security and self-employment taxes paid by Darrell and Whitney. Write a letter to Whitney in which you state how much she will have to pay in Social Security and self-employment taxes and why she owes those amounts.
How much taxable income should each of the following taxpayers report? a. Kimo builds custom surfboards. During the current year, his total revenues are 90,000, and he incurs 30,000 in expenses. Included in the 30,000 is a 10,000 payment to Kimos five-year-old son for services as an assistant. b. Manu gives hula lessons at a local bar. During the current year, she receives 9,000 in salary and 8,000 in tips. In addition, she engages in illegal behavior, for which she receives 10,000.

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