1. Jason and Mary are married taxpayers in 2013. They are both under age 65 and in good health. For this tax year, they have a total of $41,000 in wages and $500 in interest income. Jason and Mary's deductions for adjusted gross income amount to $5000 and their itemized deductions equal $7,950. They claim two exemptions for the year on their joint tax return.
A. What is the amount of Jason and Mary's adjusted gross income? 36,500 (41000+500-5000)
B. What is the amount of their itemized deduction or standard deduction? 12,200
C. What is their 2013 taxable income? 16,500 (36500-12200-2@3900)
2. Leslie is a single taxpayer who is under 65 and in good health. For 2013, she has a salary of $23,000 and itemized deductions of $1000. Leslie is entitled to one exemption on her tax return.
A. How much is Leslie's adjusted gross income? 23,000
B. What amount of itemized or standard deduction should she claim? 6,100
C. What is the amount of Leslie's taxable income? 13,000 (23000-6100-3900)
3. In 2013, Lou has a salary of $54,000 from her job. She also has interest income of $1,700. Lou is single and has no dependents. During the year, Lou sold silver coins held as an investment for a $7,000 loss. Calculate the following amount for Lou.
A. Adjusted gross income 52,500 (54000+1700-3000) (maximum allowable for loss)
B. Standard deduction 6100
C. Exemption 3900
D. Taxable income 42700 (52500-6100-3900)
4. Diego, age 28, married Dolores, age 27, in 2013. Their salaries for the year amounted to $46,479 and they had interest income of $3,500. Diego and Dolores' deductions for adjusted gross income amounted to $1,900, their itemized deductions were $10,172, and they claimed two exemptions on their return.
A. What is the amount of their adjusted gross income? 48,079 (46479+3500-1900)
B. What is the amount of their itemized deductions or standard deduction? 12,200
C. What is the amount of their taxable income? 28,079 (48049-12200-2@3900)
D. What is their tax liability for 2013? 3319.50 (1785+0.15*(28079-17850))
5. Jim (age 50) and Martha (age 49) are married witht three dependent children. They file a joint return for 2013. Their income from salaries totals $50,000, and they received $10000 in taxable interest, $5000 in royalties, and $3000 in other ordinary income. Jim and Martha's deductions for adjusted gross income amount to $3200, and they have itemized deductions totalling $13000. Calculate the following amounts:
A. Gross income 68000 (50000+10000+5000+3000)
B. Adjusted gross income 64800 ( 68000-3200)
C. Itemized deduction or standard deduction amount 13000
D. Number of exemptions 5
E. Taxable income 32300 (64800-13000-5*3900)
F. Income liability (do not consider the alternative minimum tax covered in ch. 6 or any credits) 3952.50 (1785+0.15*(32300-17850)