You will complete this assignment based on the difference between the standard and itemized deductions and...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
You will complete this assignment based on the difference between the standard and itemized deductions and their appropriate application, the steps prescribed in the tax law to determine tax liability, and key income tax planning strategies designed to reduce income tax liability. Based on your review of your tax-related information, you developed the following summary which will be utilized for the first requirement: Form W-2 Wage and Tax Statement Information Category Wages Social Security Tax Withheld Medicare Tax Withheld Federal Income Tax Withheld State Income Tax Withheld (Michigan) Category Bank Savings Account Interest Income Other Tax-Related Information Municipal Bond Investment Interest Income Property Taxes Mortgage Interest Charitable Contributions Amount Standard Deduction $60,000 $3,720 $870 $7,710 $2,700 Amount $250 $250 $3,500 $4,500 $2,550 $13,000 Tax Table Single filer taxable income is: But less than At least $46,900 $46,950 $47,000 $47,050 $47,100 $47,150 $46,950 $47,000 $47,050 $47,100 $47,150 $47,200 Your tax is $6,182 $6,193 $6,210 $6,215 $6,226 $6,237 Requirements 1. Apply the steps prescribed in the tax law to determine tax liability by addressing the following: a. Determine the amount of Gross Income and Adjusted Gross Income and show all of your work. If any income amount should be excluded, provide an explanation as to why. b. Differentiate between the standard and itemized deductions by providing an explanation of each. Next, compute the amount of Itemized Deductions and show all of your work. Compare this amount to the Standard Deduction provided in the table above. Determine the appropriate application of this concept by deciding on the amount to be utilized - Itemized Deductions or Standard Deduction. Support your decision. c. Determine Taxable Income utilizing information from the first two requirements and show all of your work. d. Based on the Taxable Income computed in the previous requirement, use the above Tax Table to determine the amount of Income Tax. Explain how you found the number in the Table. e. Determine the amount of Tax Refund or Tax Owed and show all of your work. 2. Discuss three key income tax planning strategies designed to reduce income tax liability that you could utilize for next year. It is assumed that you do not currently practice any type of income tax planning, so you can "think outside of the box" when answering this question. You will complete this assignment based on the difference between the standard and itemized deductions and their appropriate application, the steps prescribed in the tax law to determine tax liability, and key income tax planning strategies designed to reduce income tax liability. Based on your review of your tax-related information, you developed the following summary which will be utilized for the first requirement: Form W-2 Wage and Tax Statement Information Category Wages Social Security Tax Withheld Medicare Tax Withheld Federal Income Tax Withheld State Income Tax Withheld (Michigan) Category Bank Savings Account Interest Income Other Tax-Related Information Municipal Bond Investment Interest Income Property Taxes Mortgage Interest Charitable Contributions Amount Standard Deduction $60,000 $3,720 $870 $7,710 $2,700 Amount $250 $250 $3,500 $4,500 $2,550 $13,000 Tax Table Single filer taxable income is: But less than At least $46,900 $46,950 $47,000 $47,050 $47,100 $47,150 $46,950 $47,000 $47,050 $47,100 $47,150 $47,200 Your tax is $6,182 $6,193 $6,210 $6,215 $6,226 $6,237 Requirements 1. Apply the steps prescribed in the tax law to determine tax liability by addressing the following: a. Determine the amount of Gross Income and Adjusted Gross Income and show all of your work. If any income amount should be excluded, provide an explanation as to why. b. Differentiate between the standard and itemized deductions by providing an explanation of each. Next, compute the amount of Itemized Deductions and show all of your work. Compare this amount to the Standard Deduction provided in the table above. Determine the appropriate application of this concept by deciding on the amount to be utilized - Itemized Deductions or Standard Deduction. Support your decision. c. Determine Taxable Income utilizing information from the first two requirements and show all of your work. d. Based on the Taxable Income computed in the previous requirement, use the above Tax Table to determine the amount of Income Tax. Explain how you found the number in the Table. e. Determine the amount of Tax Refund or Tax Owed and show all of your work. 2. Discuss three key income tax planning strategies designed to reduce income tax liability that you could utilize for next year. It is assumed that you do not currently practice any type of income tax planning, so you can "think outside of the box" when answering this question.
Expert Answer:
Answer rating: 100% (QA)
Here is my analysis of the taxrelated information provided 1 a Gross Income is the total of all income received from all sources before any adjustment... View the full answer
Related Book For
Income Tax Fundamentals 2013
ISBN: 9781285586618
31st Edition
Authors: Gerald E. Whittenburg, Martha Altus Buller, Steven L Gill
Posted Date:
Students also viewed these finance questions
-
The following additional information is available for the Dr. Ivan and Irene Incisor family from Chapters 1-5. Ivan's grandfather died and left a portfolio of municipal bonds. In 2012, they pay Ivan...
-
The graph of f is given. (a) Why is f one-to-one? f is one-to-one because it passes the ---Select--- ? (b) What are the domain and range of f ? ?1 ?(Enter your answers in interval notation.) domain ?...
-
In the late 1990, selected automobiles had an average cost of $12,000. The average cost of those same motor vehicles 10 years later is $16,000. What was the rate of increase for this item between the...
-
A group G is nilpotent if and only if there is a normal series G = G o > G 1 > > G n = (e) such that G i /G i+1 < C(G/Gi+1) for every i.
-
How might a hacker access and manipulate a digital device for illegal purposes? Are the Internet of Things (IoT) devices at risk for hacker access and manipulation?
-
Warranties, Accrual, and Cash Basis Brooks Corporation sells computers under a 2-year warranty contract that requires the corporation to replace defective parts and to provide the necessary repair...
-
Hybrid agreements (also called wait-and-see agreements), which usually allow the issuer first priority to buy the interest and other stockholders or partners the second-place option to buy. Such...
-
Macarrys Bicycle Company makes and sells high-quality bicycles, primarily to larger North American bicycle retail outlets and to some wholesalers for smaller retail shops. They have several models,...
-
Derive the dispersion relationship equation and the velocity potential equation from the Laplace equation and Bernoulli equations. It is crucial to show each step clearly.
-
Isolated strength training is an important component of the Corrective Exercise Continuum and should be done when?
-
Discuss the implementation details and advantages of various process scheduling algorithms, such as Shortest Job Next (SJN) and Multilevel Feedback Queue (MLFQ), in modern operating systems.
-
A company is considering expanding into new markets. Identify three possible economic scenarios ( expansion success, moderate success, expansion failure ) and analyze the impact of each scenario on...
-
A company manufactures a product with an annual demand of 1 5 , 0 0 0 units. The setup cost for production is $ 6 0 0 per order, and the holding cost per unit per year is $ 8 . Calculate the Economic...
-
Investigate the challenges and solutions associated with implementing real-time operating systems for time-critical applications, encompassing topics like priority inversion and interrupt handling.
-
11. The accompanying table shows the Herfindahl-Hirschman Index (HHI) for the restaurant, cereal, movie, and laundry detergent industries as well as the advertising expenditures of the top 10 firms...
-
Provide a draft/outline of legal research involving an indigenous Canadian woman charged with assault causing bodily harm under (Sec 267b) of the Criminal Code, where the crown wants a 12-month jail...
-
During 2012, Tom sold Sears stock for $10,000. The stock was purchased 4 years ago for $13,000. Tom also sold Ford Motor Company bonds for $35,000. The bonds were purchased 2 months ago for $30,000....
-
Laura is a single taxpayer living in New Jersey with adjusted gross income for the 2012 tax year of $35,550. Laura's employer withheld $3,300 in state income tax from her salary. In April of 2012,...
-
While preparing Massie Miller's 2012 Schedule A, you review the following list of possible charitable deductions provided by Massie: Cash contribution to a family whose house burned...
-
Using a cover letter you have written, review your online presence. What key words do you see in your social networking profiles? What job experience, education, and skills are highlighted? How can...
-
All-Weather Inc. invited applications for the position of sales representative. This person will be based in Nebraska and will be responsible for sales of All-Weathers vinyl windows in local markets,...
-
Identify and correct the errors in the following passages. a. Company's are finding it to their advantage to cultivate their suppliers. Partnerships among a company and it's suppliers can yield hefty...
Study smarter with the SolutionInn App