Joe and Susan are married. They have two children, Jack and Jill ages 4 and 6. In 2020, they had the following transactions

1 Joe has taxable wages of $125,000.

2 Susan has taxable wages of $200,000

3 Interest income of $700

4 Their joint stock portfolio was valued at $39,000 on January 1, 2019. On December 31, 2019 it was valued at $47,000.

5. They paid mortgage interest of $22,000 on their primary residence.

6. They paid $6,000 of state income taxes

7 They paid $3,000 of real estate taxes.

8 They donated $6000 to their local church.

9 Susan’s mother passed away and they received $15,000 of life insurance proceeds. They used $7,500 of the proceeds to pay for the funeral.

10 Joe purchased a new SUV for $45,000. He paid $7,000 and received loan proceeds of $38,000 for the remaining purchase price.

11 Jill contributed $5,000 to her Individual Retirement Account and $3,000 to her qualified Health Savings account.

a. What is Joe and Susan’s AGI assuming they file married filing joint?

b. What is their taxable income?

c. What is their total tax after allowable deductions and credits?

Answer rating: 100% (QA)

Particulars Amount Amount Explanation Wages Joe 125000 Susan 200000 325000 As Joe and Susan are fili... View the full answer