Rebecca and Thomas are married and file jointly for the 2020 tax year. They are both advertising

Fantastic news! We've Found the answer you've been seeking!

Question:

Rebecca and Thomas are married and file jointly for the 2020 tax year. They are both advertising consultants for the same company. They earned $85,000 in salaries in total and the company forgave a $20,000 loan they made to the couple earlier in the tax year. They were solvent at the time the loan was forgiven. Their firms withheld $20,000 of tax from their salaries this year in total. In addition to the above, the following occurred during the year:

They paid $15,000 in mortgage interest and $3,000 in real estate taxes for their primary residence.
They sold their SUV for $1,500 less than its adjusted tax basis. They had owned it for 7 years. They are not high income taxpayers.

Determine Rebecca and Thomas’ AGI.

Ignore your answer in a). Assume that Rebecca and Thomas’ AGI for the year is $78,650. Determine the amount of itemized deduction that Rebecca and Thomas have available this year.

Ignore your answer in b). Assume that the amount of itemized deduction available is $21,630. Using the 2020 standard deduction amounts (assuming no additional amounts for age or blindness) from Appendix D in your book, first determine whether Rebecca and Thomas itemize or take the standard deduction. If you determine they itemize, write in the itemized deduction dollar amount given ($21,630). Alternatively, if you determine they will take the standard deduction, write in the standard deduction amount for which they qualify (tied to the appropriate filing status).

Ignore your answer in a) - c). Assume that Rebecca and Thomas’ taxable income is $147,900 and his employer withheld $20,000 in tax from his wages. Using the tax rate schedule from Appendix D in your book, determine the amount of taxes due or the amount of refund. Remember to clearly mark the answer as either the amount of tax due or a refund due (e.g. refunds are negative amounts as represented with parentheses or a negative sign). Assume AMT does not apply, and there are no tax credits available.