ACCT 2000 : Exam 3

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azuremammoth471

15 Mar 2019

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Exam 3 diffrent types of taxes: sales tax, social security taxes, property taxes, excise tax federal & state. Hobby income something that is not connected to my business but i am making profit. Interest- earning on what you have invested (taxable) Partnership income (loss) income that passes through to you and you pick it up as taxable income (it can be a loss) Royalties- money from books or songs, oil , taxable / income earned on literary works also oil and gas. Scholarships (room and board)- scholarships are not taxable but if there is an excess then it is taxable. Social security benefits- when you start receiving it then it is taxable (meant to work as a retirement) , living longer so not working. Single, 40, blind child ($ 8,700 standard deduction) Mfj 63, husband 69, blind ( $ 13,600 standard deduction) Mfj 66, blind, spouse 80 , blind(,800 standard deduction)

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Jeremy earned $140,000 in salary and $1,000 in interest income during the year. Jeremy has two qualifying dependent children who live with him. He qualifies to file as head of household and has $14,500 in itemized deductions. Neither of his dependents qualifies for the child tax credit. (use the tax rate schedules.). (Do not round intermediate calculations. Round "Income tax liability" to 2 decimal places.)

Tax Rate Schedule: https://ezto-cf-media.mheducation.com/Media/Connect_Production/bne/accounting/spilker_9e/taxrateschedulea.jpg

a:. Use the 2017 tax rate schedules to determine Jeremyâs taxes due.

	Description	Amount
(1)	Gross income
(2)	For AGI deductions	0
(3)	Adjusted gross income
(4)	Standard deduction
(5)	Itemized deductions
(6)	Greater of standard deductions or itemized deductions
(7)	Personal and dependency exemptions
(8)	Taxable income
	Income tax liability

b. Assume that in addition to the original facts, Jeremy has a long-term capital gain of $6,500. What is Jeremyâs tax liability including the tax on the capital gain?

	Description	Amount
(1)	Gross income	$147,500
(2)	For AGI deductions
(3)	Adjusted gross income	$147,500
(4)	Standard deduction
(5)	Itemized deductions
(6)
(7)	Personal and dependency exemptions
(8)	Taxable income	$147,500
	Income tax liability

c. Assume the original facts except that Jeremy had only $3,500 in itemized deductions. What is Jeremyâs total income tax liability?

DescriptionAmount

(1)Gross income$141,000

(2)For AGI deductions0

(3)Adjusted gross income

$141,000

(4)Standard deduction

(5)Itemized deductions

(6)

(7)Personal and dependency exemptions

(8)Taxable income

income tax liability

violetdolphin397

A- Fill in blanks and choose the correct answer from theparentheses:
Steps to determine tax
-Eight basic steps are used in calculating federal incometaxes:
1- Determine your total income
2. Determine and report yourâ¦â¦â¦â¦â¦â¦â¦â¦â¦ income after subtractingexclusions (net, adjusted gross, taxable, gross)
3. Subtract adjustments to income.
4. Substract either theâ¦â¦â¦â¦â¦â¦â¦â¦â¦..the amount of tax status or youritemize deductions. (adjusted gross income, personal exemptions,IRSâs standard deduction, adjustments to income)
5. Subtract the value of personal â¦â¦â¦â¦â¦â¦â¦.(deductions, exemptions,tax credits, standard deduction)
6. Determine your preliminary tax liability.
7. Subtract theâ¦â¦â¦â¦â¦â¦â¦ for which you qualify. (personal exemptions,itemized deductions, tax credits, adjustments to income)
8. Calculate the balance due the IRS or the amount of yourreturn.

B- Select which term describes each of the following items or partsof the tax return.(please choose the correct answer from theparentheses)

Item Term
1- Carpool money received (Tax-exempt income, Personal exemption, tax credit, deduction)

2- Capital gains (part of total income, part of adjustments togross income included in tax credits, include in deductions

3- Contributions to qualified personal retirements account (IRAs)(Adjustments to gr gross income, included in tax credits, personalexemptions, Included in tax deductions)

4- An amount that changes if you are over 65 years of age (standarddeduction, itemized deductions, tax credits, adjustments to grossincome)

5- State and local taxes( Included in itemized deductions, includedin personal exemptions, included in tax credits, used to calculateadjusted gross income)
6- An amount based on the number of people a taxpayersupports(personal emptions, itemized deductions, standarddeductions, adjusted gross income)

violetwalrus240

Rick, who is single, has been offered a position as a city landscape consultant. The position pays $92,500 in cash wages. Assume Rick files single and is entitled to one personal exemption. Rick deducts the standard deduction instead of itemized deductions. (use the tax rate schedules.)

2017 Tax Schedule : https://ezto-cf-media.mheducation.com/Media/Connect_Production/bne/accounting/spilker_9e/taxrateschedulea.jpg

A. What is the amount of Rickâs after-tax compensation (ignore payroll taxes)? (Do not round intermediate calculations. Round income tax liability and After-tax compensation to 2 decimal places. Enter deductions as negative amounts)

	Description	Amount
(1)	Gross income	$92,500
(2)	For AGI deductions	0
(3)	Adjusted gross income
(4)	Standard deduction
(5)	Personal and dependency exemptions
(6)	Taxable income
(7)	Income tax liability
	After-tax compensation

b-1. Suppose Rick receives a competing job offer of $87,500 in cash compensation and nontaxable (excluded) benefits worth $4,950. What is the amount of Rickâs after-tax compensation for the competing offer? (Do not round intermediate calculations. Round income tax liability and After-tax compensation to 2 decimal places. Enter deductions as negative amounts)

	Description	Amount
(1)	Gross income	$92,500
(2)	For AGI deductions	0
(3)	Adjusted gross income
(4)	Standard deduction
(5)	Personal and dependency exemptions
(6)	Taxable income
(7)	Income tax liability
	After-tax compensation

sangriadeer593

ACCT 2000 : Exam 3

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