Quinn and Elliott are a married couple who wish to file a joint return.  They have experienced the following this year: 

1. Quinn worked all year as an employee of XYZ Co. for an annual salary of: $60,000. 
2. Quinn (and Elliott) are covered by health insurance provided by XYZ Co.  On Quinn's behalf, XYZ Co. paid Blue Cross/Blue Shield ("BCBS") $5,000 for health insurance for Quinn and Elliott. 
3. BCBS paid $6,000 of medical bills that were incurred by Quinn and Elliott. 
4. Since Quinn is expected to work long hours, XYZ Co. provided Quinn with a cash meal allowance of $100 per month all year.  Quinn typically put the money toward meals at a restaurant across the street from XYZ Co.'s headquarters building. 
5. XYZ Co. withheld from Quinn's gross pay, for federal income tax: $7,500. 
6. Elliott was in an unfortunate personal car accident several years ago and is unable to work.  Fortunately, Elliott's employer at the time of the accident provided all employees with a long-term disability insurance policy at no cost to the employees.  This year, Elliott received $20,000 in disability benefits from that policy. 
7. The couple rents a bank safe deposit box in which they keep paper bonds and other important documents related to their investment activities.  The box rental cost $500 this year. 
8. The couple paid mortgage interest on their principal residence of $6,000.  The mortgage was the original mortgage the couple incurred to purchase the house which cost $220,000. 
9. The couple paid property taxes on their home of: $11,000. 
10. Quinn's father gave the couple an anniversary gift of $7,000 in cash. 
11. The couple used $5,000 of the anniversary gift to build a fabulous new deck/porch onto their home.  They had their home appraised this year, and the appraised value is currently $326,000.  The appraiser estimated that the deck had added $6,000 of value to the home. 
12. The couple paid interest on Quinn's qualified education loan in the amount of: $1,100. 
13. Elliott sold a painting this year for $12,000.  A relative had given Elliott the painting as a graduation gift in 2015 when the painting was worth $9,000.  The relative had purchased the painting for $5,000.  

 

Again, what is Quinn and Elliott's out-of-pocket tax due (i.e. the amount they pay to the Service at the time they file their return) or refund owed to them by the government for tax year 2022?  Be sure to explain how you are dealing with each item (a)-(m).  Show your work by: identifying all the steps along the way and writing out how you are deriving each mathematical answer.

Answer rating: 100% (QA)

Introduction Determining Quinn and Elliotts outofpocket tax due or refund for the tax year 2022 involves a comprehensive analysis of their income dedu... View the full answer