. Suppose your neighbor earned wages of $275,000 , received $1580 in interest from a savings account,...
Question:
. Suppose your neighbor earned wages of
$275,000
, received
$1580
in interest from a savings account, and contributed
$3800
to a tax-deferred retirement plan. He is entitled to a personal exemption of
$4050
and the same exemption for each of his two children. He is also entitled to a standard deduction of
$6300
. The interest on his home mortgage was
$51,235
. He contributed
$74,000
to charity and he paid
$12,760
in state taxes. He has no additional tax credits. Hint: the itemized deduction would include interest paid on home mortgage, contributions to charity, and amount paid in state taxes.\ Find your neighbor's:\ a). Gross Income:\ b). Adjusted Gross Income:\ c). Taxable Income:\ d). Use the 2016 marginal tax rates in Table 8.1 (found in Section 8.2 of your eText) to compute the income tax owed for your neighbor. Assume that he is filing under the status of "married, filing jointly."
Income Tax Fundamentals 2013
ISBN: 9781285586618
31st Edition
Authors: Gerald E. Whittenburg, Martha Altus Buller, Steven L Gill