John Jones is currently 28 years old and married to wife, Kate who is also 28....

   

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John Jones is currently 28 years old and married to wife, Kate who is also 28. They twin two-year old daughters and do not plan to have more children. They live in Huntington Beach, CA in a 2-bedroom condo that they purchased a few years back for $350,000, putting S40,000 down. They currently believe the market value to be $385,000. They are planning to rent out this condo when they can afford to buy a home. Their current mortgage for the condo is $1,800 per month. The property tax bill for this condo is $3300 annually, but they pay it monthly. along with their mortgage. They also pay an Association fee of $200 per month. Their home is nicely furnished with furnishings they financed from Pottery Barn, worth about S10,000. When they purchased the condo it was supplied with new appliances. The complex has a pool, playground and BBQ Area so there is not too much more they need. Their property taxes are paid with their mortgage to their bank. They are saving to buy a home in 5 years and anticipate needing about $25,000 as a down payment, John and Kate know buying a home will bring many expenses such as new appliances (maybe down the road), and moving expenses. They plan to start a savings plan to be able to have more than the S25,000 down payment for extra expenses for their new home. They have two cars; one is a 2013 Ford truck that is paid off and probably worth S10,000. Kate drives an Audi, probably worth S18,000 that they make $300 per month payment on for one more year. John is the finance officer of a nearby hospital where Kate is a Physical Therapist. Their combined income is close to $128,000 a year. (They make close to the same amount). Because they are both paid solely W-2 income, their employer takes out the state and FICA tax from each paycheck. The State Tax is roughly 5% and the FICA tax is 7.65%. They have good health insurance through their jobs and only pay $250 per month pre-tax to cover both the dependent children for medical and dental. They have minimal life insurance so they bought an additional 20-ycar term life plan that only costs S20 per month. They both still owe about $20,000 cach in student loans and cach are paying S200 per month, cach, (pre- tax - government aid student loans) and once those are paid off they will be in a better situation to really start saving for retirement. The utilities run them about $150 per month (gas, power and water is S100, and cable is S50). They have a modest cell phone package costing about $80 per month. Currently John and Kate each put S100/month into their company pension 401k plans. Their pension plan balances are roughly at $12,000 each. They would like to put more into their plans once they get their home and their student loans paid off. Their credit union savings account has a current balance of $5500. They are not sure if this is an adequate emergency fund. They are hoping to figure out where they should be putting extra funds in order to reach their financial goals. They live comfortably and are not really materialistic people. They enjoy the outdoors. beach, camping, hiking, skiing and do not really take extravagant vacations. They hope to take their children on a Disney Cruise in two years. They anticipate that vacation would cost about $5,000 and are saving for it with a special flex CD savings account through the credit union. They enjoy going to Disneyland so they have annual passes that cost them S55 monthly. They own a two-seater kayak and two paddleboards and use them locally most of the time. They estimate their personal belongings to be worth about $10,000. They enjoy sporting events and do save up about S100 per month to go to a professional game. Kate's mom watches the kids, so they save quite a bit on childcare, although they do pay ber about $400 a month just for things she needs while taking care of them. They also budget an additional S100 for other babysitting needed for date nights! College planning is alteady a long- term goal.of theirS.so they do put $100 per month away in.onc.account for thcir twins. The balance in this mutual fund is $1.200. They have one major credit card, with a balance of $900, and try to keep it paid off each month and only use for vacations and emergencies. The Pottery Bam card still has a balance of $1,200 from when they purchased their furniture. They are trying to learn how to avoid debt and to save for what they need. They currently do not have any pets. Filing status - Married Income #1 John's Income Income #2 - Kate's Income Total Gross Income Deductions Health Benefits 401k #1 401k #2 Property Tax Student Loan #1 Student Loan #2 Adjusted Gross Income (AGI) Standard Deduction *AGI Taxable income (begin Federal Tax Calculation below) State Tax (taken out of W-2 income per pay check) Federal Tax (use steps shown in class to calculate the tax in cach tax bracket) FICA Tax (taken out of W-2 income per pay check) Child Tax Credit Total Tax Paid (after eredit) **Income Please show your work HERE on how you calculate the Federal Tax using the bracket method *AGI - Adjusted Gross Income after reducing income by tax deductions and standard deduction. **Income to carry over into the budget should increase by the amount of the standard deduction as this money was not spent or lost, merely reduced for a tax calculation John Jones is currently 28 years old and married to wife, Kate who is also 28. They twin two-year old daughters and do not plan to have more children. They live in Huntington Beach, CA in a 2-bedroom condo that they purchased a few years back for $350,000, putting S40,000 down. They currently believe the market value to be $385,000. They are planning to rent out this condo when they can afford to buy a home. Their current mortgage for the condo is $1,800 per month. The property tax bill for this condo is $3300 annually, but they pay it monthly. along with their mortgage. They also pay an Association fee of $200 per month. Their home is nicely furnished with furnishings they financed from Pottery Barn, worth about S10,000. When they purchased the condo it was supplied with new appliances. The complex has a pool, playground and BBQ Area so there is not too much more they need. Their property taxes are paid with their mortgage to their bank. They are saving to buy a home in 5 years and anticipate needing about $25,000 as a down payment, John and Kate know buying a home will bring many expenses such as new appliances (maybe down the road), and moving expenses. They plan to start a savings plan to be able to have more than the S25,000 down payment for extra expenses for their new home. They have two cars; one is a 2013 Ford truck that is paid off and probably worth S10,000. Kate drives an Audi, probably worth S18,000 that they make $300 per month payment on for one more year. John is the finance officer of a nearby hospital where Kate is a Physical Therapist. Their combined income is close to $128,000 a year. (They make close to the same amount). Because they are both paid solely W-2 income, their employer takes out the state and FICA tax from each paycheck. The State Tax is roughly 5% and the FICA tax is 7.65%. They have good health insurance through their jobs and only pay $250 per month pre-tax to cover both the dependent children for medical and dental. They have minimal life insurance so they bought an additional 20-ycar term life plan that only costs S20 per month. They both still owe about $20,000 cach in student loans and cach are paying S200 per month, cach, (pre- tax - government aid student loans) and once those are paid off they will be in a better situation to really start saving for retirement. The utilities run them about $150 per month (gas, power and water is S100, and cable is S50). They have a modest cell phone package costing about $80 per month. Currently John and Kate each put S100/month into their company pension 401k plans. Their pension plan balances are roughly at $12,000 each. They would like to put more into their plans once they get their home and their student loans paid off. Their credit union savings account has a current balance of $5500. They are not sure if this is an adequate emergency fund. They are hoping to figure out where they should be putting extra funds in order to reach their financial goals. They live comfortably and are not really materialistic people. They enjoy the outdoors. beach, camping, hiking, skiing and do not really take extravagant vacations. They hope to take their children on a Disney Cruise in two years. They anticipate that vacation would cost about $5,000 and are saving for it with a special flex CD savings account through the credit union. They enjoy going to Disneyland so they have annual passes that cost them S55 monthly. They own a two-seater kayak and two paddleboards and use them locally most of the time. They estimate their personal belongings to be worth about $10,000. They enjoy sporting events and do save up about S100 per month to go to a professional game. Kate's mom watches the kids, so they save quite a bit on childcare, although they do pay ber about $400 a month just for things she needs while taking care of them. They also budget an additional S100 for other babysitting needed for date nights! College planning is alteady a long- term goal.of theirS.so they do put $100 per month away in.onc.account for thcir twins. The balance in this mutual fund is $1.200. They have one major credit card, with a balance of $900, and try to keep it paid off each month and only use for vacations and emergencies. The Pottery Bam card still has a balance of $1,200 from when they purchased their furniture. They are trying to learn how to avoid debt and to save for what they need. They currently do not have any pets. Filing status - Married Income #1 John's Income Income #2 - Kate's Income Total Gross Income Deductions Health Benefits 401k #1 401k #2 Property Tax Student Loan #1 Student Loan #2 Adjusted Gross Income (AGI) Standard Deduction *AGI Taxable income (begin Federal Tax Calculation below) State Tax (taken out of W-2 income per pay check) Federal Tax (use steps shown in class to calculate the tax in cach tax bracket) FICA Tax (taken out of W-2 income per pay check) Child Tax Credit Total Tax Paid (after eredit) **Income Please show your work HERE on how you calculate the Federal Tax using the bracket method *AGI - Adjusted Gross Income after reducing income by tax deductions and standard deduction. **Income to carry over into the budget should increase by the amount of the standard deduction as this money was not spent or lost, merely reduced for a tax calculation

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1 In the bracket method we will calculate tax according to the prescribed order of the tax For examp... View the full answer