Mr. and Mrs. Z, both in their late 40s, file a joint tax return for 2021. They have one qualifying relative dependent, a
Posted: Thu May 05, 2022 5:44 am
Mr. and Mrs. Z, both in their late 40s, file a joint tax return
for 2021. They have one qualifying relative dependent, an elderly
aunt. Mrs. Z received taxable royalty payments = $15,000 from
copyrights on music she wrote. Mr. Z is an employee with wages =
$100,000. Federal tax withholding from his paycheck =
$16,000.
Their itemized deductions = $30,000. Any preferential tax rate =
15%. Federal estimated income tax payments = $18,000.
Mr. Z also runs a part-time business that he operates as a sole
proprietor. This year’s information is as follows:
Revenue $90,000, Cost of Goods Sold, $16,000, Other Expenses =
$4,500 (including $500 for client meals at restaurants and $100
parking fines).
He made a contribution = $5,000 to a qualifying self-employed
retirement plan.
He sold some business assets, one for a gain of $1,100, all of
which is subject to depreciation recapture, and the others for a
net loss of $1,800.
Mr. and Mrs. Z have some investments. This year they received
$3,000 interest income from an investment in bonds issued by the
state of Alabama. They also sold two stocks they had held for
several years, one for a gain of $6,000 and one for a loss of
$4,000.
Calculate Mr. and Mrs. Z’s adjusted gross income (AGI),
taxable income, total tax liability, and amount due or
refund. Show your work!
for 2021. They have one qualifying relative dependent, an elderly
aunt. Mrs. Z received taxable royalty payments = $15,000 from
copyrights on music she wrote. Mr. Z is an employee with wages =
$100,000. Federal tax withholding from his paycheck =
$16,000.
Their itemized deductions = $30,000. Any preferential tax rate =
15%. Federal estimated income tax payments = $18,000.
Mr. Z also runs a part-time business that he operates as a sole
proprietor. This year’s information is as follows:
Revenue $90,000, Cost of Goods Sold, $16,000, Other Expenses =
$4,500 (including $500 for client meals at restaurants and $100
parking fines).
He made a contribution = $5,000 to a qualifying self-employed
retirement plan.
He sold some business assets, one for a gain of $1,100, all of
which is subject to depreciation recapture, and the others for a
net loss of $1,800.
Mr. and Mrs. Z have some investments. This year they received
$3,000 interest income from an investment in bonds issued by the
state of Alabama. They also sold two stocks they had held for
several years, one for a gain of $6,000 and one for a loss of
$4,000.
Calculate Mr. and Mrs. Z’s adjusted gross income (AGI),
taxable income, total tax liability, and amount due or
refund. Show your work!