B 1000 of itemized deductions possible c standard

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B) $1,000 OF ITEMIZED DEDUCTIONS POSSIBLE. C) STANDARD DEDUCTION. D) $3,930 TAX DUE.
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4. Rebecca and Thomas are married and file jointly for the 2016 tax year. They are both advertising consultants for the same company. They earned $85,000 in salaries in total and the company forgave a $20,000 loan they made to the couple earlier in the tax year. They were solvent at the time the loan was forgiven. Their firms withheld $20,000 of tax from their salaries this year in total. In addition to the above, the following occurred during the year: They paid $15,000 in mortgage interest and $3,000 in real estate taxes for their primary residence. BELOW - ALL Rebecca paid $6,000 in college tuition this year to take additional communications courses to improve her advertisement presentation skills . ABOVE FOR $4,000 WORTH. OR BELOW – EXTENT OVER 2%. Threshold = 2% x $105,000 = $2,100 (STAYED IN SAME BUSINESS). So, $3,900. They sold their SUV for a $1,500 less than its adjusted tax basis. They had owned it for 7 years. NOT DEDUCTIBLE – PERSONAL CAPITAL LOSS The answers for the MISC DED version is in green while the FOR AGI version is in yellow. I will accept the answer if you just used the FOR AGI tuition and fees deduction or the MISC DED for the education costs to stay in the same field. On the exam, do not consider the miscellaneous deduction expense for tuition and fees. The only education related deductions I’ll ask about are the two FOR AGI deductions . Use individual tax formula : Wages and loan forgiven = $105,000 FOR AGI = -$4,000 OR $0 AGI = $101,000 OR 105,000 ITEMIZED DED. POSSIBLE = -$18,000 OR -$21,900 (– $18,000 – $3,900) USE ITEMIZED DEDUCTIONS EXEMPTION(S): -$4,050 X 2 = -$8,100 TAXABLE INCOME: $74,900 OR $75,000 TAX LIABILITY: $14,980 OR $15,000 PREPAYMENTS: $20,000 TAX DUE (REFUND): ($5,020) OR ($5,000) ANSWERS:
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