Bill is entitled to fi le as a surviving spouse using

Info icon This preview shows pages 12–15. Sign up to view the full content.

View Full Document Right Arrow Icon
Bill is entitled to fi le as a surviving spouse, using the same tax rate schedule as married persons fi ling a. jointly. However, he is entitled to claim only three personal exemptions in 2009. Bill meets the requirements to fi le as head of household. Parents need not live with the taxpayer. b. Bill must fi le as single. To qualify as head of household, a taxpayer must be able to claim a married child c. as a dependent. Dependency exemption is not allowed where a married child fi les a joint return with the spouse. However, if the joint return were fi led only to claim a refund and no tax liability would exist for either spouse on separate returns, then Bill would qualify as head of household. Filing Status: Surviving Spouse 2009—Married fi ling jointly and three personal exemptions. Allowed a joint return in year of death. 48. 2010—Surviving spouse with two personal exemptions. 2011—Surviving spouse with two personal exemptions. 2012—Head of household with two personal exemptions.
Image of page 12

Info icon This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
43 Instructor’s Manual © 2009 CCH. All Rights Reserved. Chapter 3 Filing Status Since Mike and Ellen are not divorced they are still eligible to fi le as married fi ling jointly. A second 49. alternative would be for Ellen to fi le as head of household since she has custody of the children and quali fi es as an abandoned spouse, while Mike would have to fi le as married fi ling separately. Of course they could each fi le as married fi ling separately, but that is less favorable than Ellen fi ling as head of household. Return Requirements 50. No return is required. Rebecca’s income is less than the total of the standard deduction amount plus the a. personal exemption. However, if Rebecca is eligible to be claimed as a dependent of someone else, she is required to fi le a return because her earned income exceeds $5,700. A return is required. Gross income exceeds $18,700 ($11,400 + $3,650 + $3,650). b. A return is required. Earnings from self-employment exceed $400 ($450 × .9235 = $415.58). c. Tax Rate Schedules v. Tax Tables Since their taxable income ($93,100) is less than $100,000, they must use the tax tables. 51. Adjusted gross income $112,000 Less: Itemized deductions 11,600 Less: Personal exemptions (2 × $3,650) 7,300 Taxable income $93,100 Income Tax Computation: Single Person 52. Gross income $30,000 Less: Deductions for adjusted gross income 1,800 Adjusted gross income $28,200 Less: Itemized deductions v. $5,700 5,900 Less: Personal exemption 3,650 Taxable income $18,650 Tax from tax rate schedule $ 2,380 Income Tax Computation: Various Filing Statuses 53. $11,243.75 ($9,350.00 + 25% of $7,575) a. $15,264.75 ($13,318.75 + 28% of $6,950) b. $15,056.25 ($4,675.00 + 25% of $41,525) c. $13,721.25 ($6,227.50 + 25% of $29,975) d. Self-Employment Tax Computation 54. Maximum subject to self-employment tax and Social Security tax $106,800 Less: Wages subject to Social Security tax 30,000 Remaining maximum subject to social security tax $76,800
Image of page 13
44 CCH Federal Taxation—Basic Principles Chapter 3 © 2009 CCH. All Rights Reserved. $18,470 subject to self-employment tax—lesser of $76,800 or $18,470 self-employment income ($20,000 × .9235). At 15.3 percent, the tax due is $2,825.91.
Image of page 14

Info icon This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Image of page 15
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern