Ch 8 HW Solutions

Ch 8 HW Solutions - Chapter 8 Selected Homework Solutions...

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Chapter 8 Selected Homework Solutions 71. Determine whether each of the following taxpayers must file a return in 2011: a. Jamie is a dependent who has wages of $3,700. Jamie's standard deduction is equal to her wages, so she does not have to file. b. Joel is a dependent who has interest income of $1,200. Joel's unearned income is greater than $950, so he has to file a return. c. Martin is self-employed. His gross business receipts are $24,000, and business expenses are $24,300. His only other income is $2,600 in dividends from stock he owns. Although Martin's net income from self-employment is less than $400, his total gross income is $26,600, which is greater than $9,500 ($5,800 + $3,700). He must file a return. d. Valerie is 68 and unmarried. Her income consists of $6,500 in Social Security benefits and $10,800 from a qualified employer-provided pension plan. Valerie's gross income is $10,800 which is less than $10,950 ($5,800 + $3,700 + $1,450 exemption for age) and she is not required to file a return. e. Raul and Yvonne are married and have 2 dependent children. Their only income is Raul's $20,000 salary. Raul and Yvonne's gross income of $20,000 is more than $19,000 [$11,600 + (2 x $3,700)], so they must file a tax return. Note: The dependency exemptions are not included in determining whether Raul and Yvonne have to file a return. Therefore, even though their taxable income will be zero [$20,000 - $19,000 - $7,400 ($3,700 x 2)], they still must file a tax return. In fact, they should receive a refund because of his tax withholdings, the child tax credit, and the earned income tax credit. 72. Determine whether each of the following taxpayers must file a return in 2011: a. Felicia is a dependent who has wages of $5,700 and interest income of $225. Because Felicia's gross income of $5,925 is more than her standard deduction of $5,800, she must file a return. b. Jason is a dependent who has interest income of $600. Jason's unearned income is less than $950, so he does not have to file a return. c. Jerry is self-employed. His gross business receipts are $43,000, and business expenses are $40,300. His only other income is $1,200 in interest from municipal bonds.
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Because Jerry's gross income of $43,000 is greater than $9,500 ($5,800 + $3,700), he must file a return. In addition, Jerry must file because his self-employment income is greater than $400. d. Magnus is 69, unmarried and legally blind. His income consists of $10,500 in Social Security benefits and $10,600 from a qualified employer-provided pension plan. Magnus's gross income is $10,600, which is less than $10,950 ($5,800 + $3,700 + $1,450 age exemption) and he is not required to file a return. e. Wayne and Florencia are married and have 1 dependent child.
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Ch 8 HW Solutions - Chapter 8 Selected Homework Solutions...

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