Reference no: EM13567486
Cindy (age 40) and Don (age 39) Cowen are married. Don's 17 year old son from a former marriage lives with them. Ella's only income during 2013 was interest of 5,200. Cindy works as a retail manager and Don is a self-employed electrician. Their 2013 tax and other information are as follows:
Salary- Cindy 50,000
Federal withholding on salary 18,000
State withholding on salary 2,000
Interest income on bonds:
Issued by webster Bank 3,000
State of Connecticut 2,000
Savings account interest 700
Dividends from RGR, Inc (all are non-qualified) 5,000
Value of employer provided medical insurence 3,000
Value of premiums for $50,000 of group term life insurence 500
Cindy's mother's medical expenses paid by Cindy 9,500
Inheritance from Cindy's father's estate 7,500
Personal loan obtained to pay credit card debt 20,000
Interest paid on personal loan 1,000
Child support received from Don's ex-wife 8,000
Alimony paid to Don's ex-wife 3,400
Donations to church 1,500
Real Estate taxes
on primary residence 4500
Mortgage interest on primary residence (<$1m) 3="" 000="" p="">
Don's business revenues 40,000
Don's business expenses 16,750
DETERMINE THE FOLLOWING FOR THE COWEN'S TAX YEAR:
A. exclusion (if any)
b. gross income (excluding Don's SE income)
c. Don's net self-employment income
d. Adjusted gross income
e Itemized deduction or standard deduction amount
f. Deduction for xemptions
g. Taxable income
h. Income tax liability
i Self employment tax liability
j. Net tax due/ (refund)