Mickey, age 45, and Minnie Mouse, age 46, are married, cash basis taxpayers who plan to file
Question:
Mickey, age 45, and Minnie Mouse, age 46, are married, cash basis taxpayers who plan to file a joint return. Mickey is a county employee, and Minnie is a self-employed accountant.
Minnie has the following income and expenses related to her accounting practice for 2021:
Revenue (cash receipts) 185,000
Expenses: Salaries 45,000
Office supplies 3,200
Postage 2,900
Depreciation on equipment 42,000
Telephone 800
Minnie used one room in their 10-room house as the office for her accounting practice (400 square feet out of a total square footage of 4,000). They paid the following expenses related to the house during 2021:
Utilities 4,500
Insurance 2,100
Property taxes 5,200
Repairs 3,500
Depreciation (office space only) 1,026
Mickey received a salary of $52,000 during 2021. Mickey had $3,750 of Federal income taxes and $2,000 of state income taxes withheld.
Mickey and Minnie made charitable contributions of $22,600.
They made estimated Federal income tax payments of $20,000.
Compute Mickey and Minnie’s Federal income tax payable or refund due for 2021.
Expert Answer:
Mickey and Minnie owe 2874 in Federal income tax for 2021 WORKINGS Minnie Gros... View the full answer
