Multiple choicehead of household requirements 3345 59

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Multiple Choice—Head of Household Requirements (¶3345) 59. Comprehensive Problem—Tax Computation 60. Comprehensive Problem—Tax Computation 61. Research Problem—Divorce and Remarriage 62. Answers to Problems Taxable Income Computation: Married Taxpayers Tom and Linda’s taxable income is $13,650. 31. Adjusted gross income $40,000 Less: Itemized deductions v. $11,400 11,750 Less: Personal exemptions (4 × $3,650) 14,600 Taxable income $13,650 Taxable Income Computation: Single Taxpayer Marie’s taxable income is $50,050. 32. Adjusted gross income $70,000 Less: Itemized deductions v. $8,350 9,000 Less: Personal exemptions (3 × $3,650) 10,950 Taxable income $50,050 Itemized Deductions v. Standard Deduction 33. Robert should itemize. His itemized deductions exceed the standard deduction of $5,700. a. Jane will not itemize. Her deductions do not exceed $8,350. b. Brian’s itemized deductions exceed the $5,700 standard deduction for married individuals fi ling c. separately; therefore, he will itemize. As a surviving spouse, Lisa has a standard deduction of $11,400. Therefore she will not itemize. d. Phaseout of Itemized Deductions The $20,000 of itemized deductions must be reduced by $332 (($200,000 $166,800) × 3% × 1/3) leaving 34. an itemized deduction of $19,668.
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40 CCH Federal Taxation—Basic Principles Chapter 3 © 2009 CCH. All Rights Reserved. Taxable Income: Personal Exemptions and Standard Deduction Taxable income is $4,000. 35. a. Adjusted gross income $30,000 Less: Standard deduction 11,400 Less: Personal exemptions (4 × $3,650) 14,600 Taxable income $4,000 Taxable income is $10,650. b. Adjusted gross income $20,000 Less: Standard deduction 5,700 Less: Personal exemption 3,650 Taxable income $10,650 Taxable income is $200. c. Adjusted gross income $3,100 Less: Standard deduction (earned income plus $300) 2,900 Taxable income $200 Taxable income is $45,150. d. Adjusted gross income $65,000 Less: Itemized deductions of $8,900 v. standard deduction of $5,700 8,900 Less: Personal exemptions (3 × $3,650) 10,950 Taxable income $45,150 Taxable income is $52,550. e. Adjusted gross income $65,000 Less: Itemized deductions 1,500 Less: Personal exemptions (3 × $3,650) 10,950 Taxable income $52,550 Phaseout of Itemized Deductions Adjusted itemized deductions are $16,800. 36. Medical expenses $8,000 Property taxes $3,000 Housing interest 4,000 Miscellaneous itemized deductions 5,000 $12,000 Less: of 3% of AGI in excess of $166,800 limited to 80% of $12,000 × 3,200 8,800 Adjusted itemized deductions $16,800
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41 Instructor’s Manual © 2009 CCH. All Rights Reserved. Chapter 3 Taxable Income: Standard Deduction—Dependents Mary is allowed the full standard deduction since her earned income plus $300 exceeds the standard 37. deduction. She is not allowed a personal exemption. Adjusted gross income $6,400 Less: Standard deduction 5,700 Taxable income $700 Taxable Income: Standard Deduction—Dependents Stanley’s taxable income is $1,700. 38. Adjusted gross income $3,000 Less: Standard deduction (earned income + $300) 1,300 Taxable income $1,700 If Stanley is age 16, $1,600 will be taxed at his marginal rate of 10 percent and $100 (net unearned income ($2,000 $950 $950)) will be taxed at his parents’ marginal rate.
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