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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