Question 3 Question 3 Question 3 Question 3 Form 1040 4-29 Part a 4-29 Part b 4-29 Part c Scenario Q Scenario R Scenario S Scenario T Line 1z: Wages and salaries total 154,800 Line 2: Interest Income 2,100 2,750 Line 3: Dividend Income 3,500 7,900 Line 7: Capital gain or Loss 4,000 61,000 30,000 Line B: Other income from Schedule 1, Line 10 0 Line 9: Total Income 221,400 Line 10: Schedule 1, Line 26 deductions 0 Line 11: AGI 221.400 Line 12: Standard or itemized 25,000 Line 13 QBID Line 14: Line 12 + Line 13 Line 15: Taxable Income Line 16: Tax on Taxable Income Line 19: Child tax credit (non-refundable part) Line 23: Total tax from schedule 2 (SE, 8959, 8960) Line 24: Total Tax (Line 16 - Line 19 + Line 23] Line 25: Taxes withheld Line 32: Refundable credits (BIC; additional child tax credit; AOC) Line 33 Total Payments: Line 25 + Line 32 Line 34: Refund Line 37: Amount OwedCe Line 1: Form 1040, Line 15 (Taxable income) Question 3. Scenario OQ. Question 3 Scenario RA Question 3 Scenario 5. Question 3 Scenario T Line 2: Form 1040, Line 5a [Qualified dividends) Line 3: Line 7 Capital gains Line 4: Add Lines 2 and 5 Line 5: Line 1 -Line4 Line 6: Statutory cutoff: 47,025,'04 050/63 000 {singleMFl,HH] Line 7: Smaller of Line 1 or Line 6 Line &: Smaller of Line 5 or Line 7 Line 8: Line 7 - Line &: Amount taxed at O% Line 10: Smaller of Line 1 or Line 4 Line ii: Line 9 Line 12: Line 10- Line 11 Line 13: Statutory cutoffs: 516,900/583,750/'551,550 (single MFIYHH] Line 14: Smaller of Line 1 or Line 13 Line 15: Add Lines 5 and Line 9 Line 25: Line 14 - Line 15 (if negative, enter 0) Line 27: Smaller of Line 12 or Line 16 (amount taxed at 15%) Line 18: Multiply line 17 by 15% Line 19: Add Line 9 and Line 17 Line 20: Line 10 - Line 19 (amount taxed at 20%) Line 21: Line 20 * 203% Line 22: Tax on line 5, using tables Line 23: Add Lines 18, 21, and 22 Line 24: Tax on all income or tax on Line 1 Line 25: Smaller of line 23 or line 24: Tax to Bo onto form 1040, line 16 Way 1 Savings for lower rate on capital gains Way 2 Savings for lower rate on capital gains Scenario Q Scenario R Scenario S Scenario T Status Single HH MFJ MFJ Minor children 0 0 0 0 Wage Income 154,800 273,450 532,900 58,000 Interest income on municipal bonds (tax-free) 0 2,000 3,000 0 Interest income on corporate bonds 2,100 2,750 3,490 2,900 Qualified dividend income 3,500 4,800 9.900 14,000 Non-Qualified dividend income 0 3,100 3,400 0 Proceeds from selling stock that was purchased 5 years ago 75,000 120,000 220,000 0 Cost of that stock 5 years ago 14,000 40,000 60,000 0 Medical expenses paid 8,100 8,100 8,100 4,122 Home mortgage interest paid 6,400 17,100 0 State income taxes paid 7,350 9,000 32,000 3,368 Local property taxes paid 0 8,300 14,500 0 Charitable contributions paid 240 2,500 4.800 35 Unreimbursed job expenses 690 1,100 1,950 1,950 Federal income taxes withheld 36,500 74,000 159,000 4,000Question 3 Question 3 Question 3 Question 3 Schedule 1 Part II: Adjustments to Income Scenario Q Scenario R Scenario S Scenario T Line 15: Deductible part of self-employment tax (Schedule SE Line 20: IRA deduction Line 25: Total adjustments, Lines 11 to 23 and 25 Goes to 1040, Line 10on Rape oO ep) oo Line 3: Business Income or Loss from Schedule c Question 3 Scenario T Line 5: Rental income, royalty income, Pthip, S-corp, Schedule E Line 7: Unemployment compensation Line 8b: Gambling income Line Si: Prizes and awards Line 8j: Activity not engaged in for profit income (hobby) Line 8: Total of lines 2 to 82 Line 20: Lines 1 to 7 and line 9: goes to 1040, line 3 Question 3 Question 3 Question 3 Question 3 89 Schedule A: Itemized Deductions Scenario Q Scenario R Scenario S Scenario T Line 1: Amount spent on medical Line 2: AGI (form 1040, line 11) Line3: AGI * 7.5% Line 4: Medical deduction [line 1 - line 3; if negative, enter 0) Line 53: State income or sales tax Line Sb: Real estate taxes Line 5c: Personal property taxes Line 5d: Total taxes Line Se: Min of 10,000 or line 5d Line 6: Other taxes Line 7: Tax deduction (line Se + line 6] Line 10: Interest deduction Line 14: Charitable deduction Line 15: Casualty deduction Line 16: Other deductions Total Itemized deductions 25,000 25,000 7,000 Standard or Itemized (put this amount on line 12, form 1040] 25,000