21 Problem
d606e40e113ae11d29754483f9a36c365fe2328a.xls
Page
17 12
Pam is single with one exemption.
Salary Federal income tax witheld FICA withheld (7.65%) North Carolina Income tax withheld Take home pay
2010
$50,000.00 (10,000.00) (3,825.00) (2,000.00) 34,175.00
Line 7 Line 8-21 Line 22
2011
$55,000.00 (11,000.00) (4,207.50) (2,200.00) 37,592.50 55,000.00 0.00 0.00
Tax Return Information
Salary income Fm. 1040 Append. C-2 Other income Fm. 1040 Append. C-2 Gross income Fm. 1040 Append. C-2 Deductions for Adjusted Gross Income 50,000.00 0.00 0.00
Line 42
25 27
Adjusted Gross income Itemized Deductions
26 26 26 26 Exemption Fm. 1040 Append. C-3 Adjusted Gross income, less exemption
25 20, App. B9
Charitable contributions Append. C-4 Home mortgage interest Append. C-4 Property taxes on home Append. C-4 State income taxes Append. C-4 Total itemized deductions Append. C-4 Amount of Standard Deduction Taxable income (before considering impact of state income tax refund for 2011)
Line 16 Line 10 Line 6 Line 5 Line 29
500.00 3,000.00 500.00
500.00 3,000.00 500.00
5,700.00 Line 43
5,800.00
Income Tax for 2010
Total
Income
34,000.00
Rate
25%
Tax-2010
4,681.25
Fm 1040, Ln 44 Fm 1040, Ln 73
Federal Income Tax Due (Refund) for 2011
Please complete Form 1040 and Schedule A. (See page B9, and instructor will explain.) $1,000.00 Taxpayer will receive a state tax refund for 2010 of: 1. How much of the state income tax refund is 2010 2011 included in federal taxable income (and when)? $300.00 Textbook page 2-10 has more on tax benefit rule. Assume Federal tax law in 2011 is same as in 2010. Federal standard deduction $5,700.00 $5,800.00 2. How much FICA would be withheld with salary of
Form 1040
Line 10 2-10 B-2, 9 12-13
Income
Max. base for both rates 106,800.00 Total 25 28-32
Rate
7.65%
$150,000.00 FICA Tax-2010
3. If taxpayer won $1,000 in lottery in 2010, how much federal income tax would be paid on that income? 4. Will taxpayer save more federal income tax by making an extra charitable contribution of $2,000 in 2011 than in 2010? Ignore time value of money. 5. Assume taxpayer learns that the $500 check for the contribution (shown above for 2010) was actually mailed to the charity on January 15, 2011. What is corrected taxable income for 2010?
12 13 15
6. How much FICA will employer pay the IRS? 7. What other Fed. taxes will employer pay for 2010? 8. What is impact if taxpayer's parents made gift of $30,000 to taxpayer in 2010?
Solution
d606e40e113ae11d29754483f9a36c365fe2328a.xls
Page
17 21 12
Pam is single with one exemption.
Salary Federal income tax witheld FICA (7.65%) withheld North Carolina Income tax withheld Take home pay
2010
$50,000.00 (10,000.00) (3,825.00) (2,000.00) 34,175.00
Line 7 Line 8-21 Line 22
2011
$55,000.00 (11,000.00) (4,207.50) (2,200.00) 37,592.50 55,000.00 0.00 55,000.00 0.00 55,000.00 3,700.00 51,300.00 500.00 3,000.00 500.00 2,200.00 6,200.00 5,800.00 $45,100.00
Tax Return Information
Salary income Fm. 1040 Append. C-2 Other income Fm. 1040 Append. C-2 Gross income Fm. 1040 Append. C-2 Deductions for Adjusted Gross Income 50,000.00 0.00 50,000.00 0.00 50,000.00 3,650.00 46,350.00 500.00 3,000.00 500.00 2,000.00 6,000.00 5,700.00 $40,350.00
25 27
Adjusted Gross income Itemized Deductions
26 26 26 26 Exemption Fm. 1040 Append. C-3 Adjusted Gross income, less exemption
Line 42
25 20, App. B9
Charitable contributions Append. C-4 Home mortgage interest Append. C-4 Property taxes on home Append. C-4 State income taxes Append. C-4 Total itemized deductions Append. C-4 Amount of Standard Deduction Taxable income (before considering impact of state income tax refund for 2011)
Line 16 Line 10 Line 6 Line 5 Line 29
Line 43
Income Tax for 2010
Total
Income
34,000.00 6,350.00 40,350.00
Rate
25%
Tax-2010
4,681.25 1,587.50 6,268.75
Fm 1040, Ln 44 Fm 1040, Ln 73
Federal Income Tax Due (Refund) for 2011
$3,731.25
Form 1040
Line 10 2-10 B-2, 9 12-13
Please complete Form 1040 and Schedule A. (See page B9, and instructor will explain.) $1,000.00 Taxpayer will receive a state tax refund for 2010 of: 1. How much of the state income tax refund is 2010 2011 included in federal taxable income (and when)? $300.00 Textbook page 330 has more on tax benefit rule. Assume Federal tax law in 2011 is same as in 2010. Federal standard deduction $5,700.00 $5,800.00 2. How much FICA would be withheld with salary of
Income
Max. base for both rates 106,800.00 43,200.00 Total 150,000.00 25 28-32
Rate
7.65% 1.45%
$150,000.00 FICA Tax-2010 8,170.20 626.40 8,796.60
3. If taxpayer won $1,000 in lottery in 2010, how much federal income tax would be paid on that income? 4. Will taxpayer save more federal income tax by making an extra charitable contribution of $2,000 in 2011 than in 2010? Ignore time value of money. 5. Assume taxpayer learns that the $500 check for the contribution (shown above for 2010) was actually mailed to the charity on January 15, 2011. What is corrected taxable income for 2010?
$250.00 No
$40,650.00 $7,650.00 $434.00 Fed Unempl.
12 13 15
6. How much FICA will employer pay the IRS? 7. What other Fed. taxes will employer pay for 2010?
8. What is impact if taxpayer's parents made gift of $30,000 to taxpayer in 2010?