Tony Johnson (I.D. No. 456-23-7657), age 45, is single. He lives at 5220 Grand Avenue, Brooklyn, NY 10016. Tony is employed by RTI Corporation, which operates a chain of restaurants in and around New York City. He has supervisory responsibilities over the managers of four restaurants. An examination of his records for 2021 revealed the following information.

1. During the year, Tony earned $33,000. His employer withheld $2,200 in Federal income taxes and the proper amount of FICA taxes. Tony obtained his current job through an employment agency to which he paid a $150 fee. He previously was employed as a manager of another restaurant. Due to the new job, it was necessary to improve his wardrobe. Accordingly, Tony purchased several new suits at a cost of $600.

2. On the days that Tony works, he normally eats his meals at the restaurants for purposes of quality control. There is no charge for the meals, which are worth $2,000.

3. He provides 60% of the support for his father, age 70, who lived with Tony all year and who has no income other than Social Security benefits of $7,000 during the year. Tony provided more than one-half of the cost of maintaining the home.

4. Dividend income from Chevron Corporation stock that he owned was $350. Interest income on savings was $200.

5. Tony and other employees of the corporation park in a nearby parking garage. The parking garage bills RTI Corporation for the parking. Tony figures that his free parking is worth $1,000 annually.

6. Tony subscribes to several trade publications for restaurants at a cost of $70.

7. During the year, he paid $200 to a bank for a personal financial plan. Based on this plan, Tony made several investments, including a $2,000 contribution to an individual retirement account, and also rented for $30 a safety deposit box in which he stores certain investment related documents.

8. Tony purchased a new home, paying three points on a loan of $70,000. He also paid $6,000 of interest on his home mortgage during the year. In addition, he paid $650 of real property taxes on the home. He has receipts for sales taxes of $534.

9. While hurrying to deliver an important package for his employer, Tony received a $78 ticket for violating the speed limit. Because his employer had asked that he deliver the package as quickly as possible, Tony was reimbursed $78 for the ticket, which he paid.

Compute Tony’s taxable income for the year. If forms are used for the computations, complete Form 1040 and Schedule A.

FACT CHANGES: Wages are $100,000 instead of $33,000. Federal income tax withheld on wages is $12,000, not $2,200. New York tax withheld on wages is $5,000. Property taxes are $6,500 instead of $650. All other facts are unchanged.

Answer rating: 100% (QA)

Department of the TreasuryInternal Revenue Service 1040 US Individual Income Tax Return Filling FX S... View the full answer