John Murray is a florist and earned wages in 2020 of $53,650. Ellen Murray, John's wife,...
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John Murray is a florist and earned wages in 2020 of $53,650. Ellen Murray, John's wife, inherited tax-exempt bonds from her deceased uncle several years ago. The bonds are in her name alone. The bonds paid $5,200 of interest in 2020. The Murray's have one child, Margaret, age 10. Mrs. Murray's mother, Maude Stanley, is a widow who lives with the Murrays. Maude Stanley received $10,000 in social security benefits and is self-supported. Mrs. Stanley's sister, who resides in a nursing home, received $5,950 during the year in social security benefits. Except for the social security benefits, the total cost of the sister's support at the home during the year, $15,000, was provided entirely by Ellen. John and Ellen Murray had apartment rental income during the tax year of $9,500 from property owned jointly by them. Assume that the Murrays do not itemize deductions; compute their joint income tax liability for 2020 before tax credits. John Murray is a florist and earned wages in 2020 of $53,650. Ellen Murray, John's wife, inherited tax-exempt bonds from her deceased uncle several years ago. The bonds are in her name alone. The bonds paid $5,200 of interest in 2020. The Murray's have one child, Margaret, age 10. Mrs. Murray's mother, Maude Stanley, is a widow who lives with the Murrays. Maude Stanley received $10,000 in social security benefits and is self-supported. Mrs. Stanley's sister, who resides in a nursing home, received $5,950 during the year in social security benefits. Except for the social security benefits, the total cost of the sister's support at the home during the year, $15,000, was provided entirely by Ellen. John and Ellen Murray had apartment rental income during the tax year of $9,500 from property owned jointly by them. Assume that the Murrays do not itemize deductions; compute their joint income tax liability for 2020 before tax credits.
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To compute the joint income tax liability for John and Ellen Murray for the tax year 2020 we need to calculate their total income deductions exemptions and taxable income Based on the information provided the following calculations can be made 1Calculate Total Income Johns wages 53650 Ellens taxexempt bond interest 5200 Rental income 9500 Maude Stanleys Social Security benefits 10000 Sisters Social Security benefits 5950 Total Income 53650 5200 9500 10000 5950 84300 1Calculate Adjusted Gross Income AGI Since there are no itemized deductions provided we assume they take the standard deduction For 2020 the standard deduction for a married couple filing jointly is 24800 AGI Total Income Standard Deduction 84300 24800 59500 2Calculate Taxable Income Taxable Income AGI Exemptions Since the number of exemptions is not provided we will assume that John Ellen and Margaret each qualify for one exemption ... View the full answer
Related Book For
Introduction to Governmental and Not for Profit Accounting
ISBN: 978-0132776011
7th edition
Authors: Martin Ives, Terry K. Patton, Suesan R. Patton
Posted Date:
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