Kristoff and Anna, married, report the following for 2023.

a.) Anna works full-time as a school teacher. Her W-2 reported $40,000 in wages. She spent $500 of her own money on school supplies for her classroom.

b.) Kristoff opened his own business this year. The business opened its doors on March 3, 2023 and incurred $7,000 of start up costs before opening. Kristoff purchased a computer for $1,000 and placed it in service on March 15, 2023. He also purchased some machinery for $5,000 and placed it in service on April 3, 2023.

Finally he purchased a warehouse storage building for $55,000 and placed it in service November 3, 2023. He is not electing bonus or 179. He is cash basis and billed clients $70,000 for services provided, collecting $60,000 of that amount. He used his personal car for business, driving 4,000 miles for business.

He paid $5,000 in utilities, $1,000 for business meals, $750 on entertainment for clients, and $3,000 for an insurance policy that runs from April 1, 2023 through March 31, 2024.

 Calculate Kristoff and Anna’s AGI.

Answer rating: 100% (QA)

To calculate Kristoff and Annas Adjusted Gross Income AGI we need to consider the income and deducti... View the full answer