Homework Problem II

Billie Eilish is a single parent living with her two daughters, whom she provides all support. Her daughters are age $12$ and $19$ years old, with the eldest attending GCC$.$ During the past year, her investments have appreciated from a cost of $$20,000$ to a year$-$end value of $$22,000.$ She had income and expenditures for the year as follows.

Salary

Prizes won on Wheel of Eortune

Interest income from:

Bank account

City of Mesa bonds $900$

Illegal income

Inheritance received

Gift from parent

Contribution $to$ Roth I.$R.A.10,000$

$,5,000$

Potential Itemized Deductions:

$\backslash$table$[[$Diamondbacks season tickets,$4,400],[$Food$,6,000],[$Interest expense on car loan,$1,200],[$Interest expense on home mortgage,$8,000],[$Property taxes paid $($car and home$),2,000],[$Charitable contributions,$2,000],[$Federal income tax withheld,$5,000],[$State income tax withheld,$1,800],[$Tuition and books for GCC$,2,800]]$

Food $,4,400$

Interest expense on car loan

Interest expense on home mortgage

Property taxes paid $($car and home$)$

Charitable contributions

Federal income tax withheld

State income tax withheld

Tuition and books for GCC

$$75,000$

$4,000$

$900$

$2,000$

$7,000$

$40,000$

$10,000$

$5,000$

$$75,000$

$4,000$

$2,000$

$7,000$

$40,000$

$5,000$

Compute the amount of: a$)$ taxable income,

b$)$ income taxes, and

c$)$ amount of tax to be paid $($refunded$)$

Note: It is not acceptable to submit this page as homework. Prepare answer, in good form, on a separate sheet.

ACC $212/240$ Income Taxes $-$ Page $17$