Michael and Mackenzie are married and file a joint return. They provide you with the following information
Question:
Michael and Mackenzie are married and file a joint return. They provide you with the following information relating to their 2020 tax return.
Michael received a W-2 Form for wages of $150,000. The income tax withheld was $8,500.
Mackenzie spends time volunteering and spends 900 hours during the year volunteering. When she doesn't volunteer she coaches basketball at a college and earns $8.00 per hour. The W-2 she received from the school reported wages of $3,888 and state income tax withheld of $85.
On December 18th they donated a small building to the Girl Scouts of America. They bought the building 3 years ago for $80,000 and it was appraised at $96,000 FMV.
They both had unreimbursed medical procedures that were necessary for health reasons of $3,000 and paid $1,900 in health insurance premiums.
During the year they bought a car for $30,000 and financed $12,000. They incurred $750 of interest on that loan in 2020.
They took out a home equity loan of $75,000 to pay off some old credit card bills. The interest on that loan was $1,200.
Their original mortgage interest on their personal residence was $2,300
The real estate taxes on their home was $17,586
They sold stock for $5,200 which they purchased for $7,900 in March of 2020. They also sold stock for $12,500 which was purchased several years ago for $8,600.
Michael has a few expenses related to his profession, none of which are reimbursed by his employer. One was a subscription for journals of $250 and the other was a membership fee of $750.
In February of 2020, they paid $700 for their personal income tax returns.
They have no children
TASK: Compute Michael and Mackenzie's taxable income for 2020.
Compute tax liability and refund or amount due
Expert Answer:
