Reference no: EM132316725

Question No.1

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Jeremy earned $101,500 in salary and $7,500 in interest income during the year. Jeremy's employer withheld $11,200 of federal income taxes from Jeremy's paychecks during the year. Jeremy has one qualifying dependent child who lives with him. Jeremy qualifies to file as head of household and has $29,700 in itemized deductions.

a. Determine Jeremy's tax refund or taxes due.
b. Assume that in addition to the original facts, Jeremy has a long-term capital gain of $11,050. What is Jeremy's tax refund or tax due including the tax on the capital gain?
c. Assume the original facts except that Jeremy had only $7,000 in itemized deductions. What is Jeremy's tax refund or tax due?

Question No. 2

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Rick, who is single, has been offered a position as a city landscape consultant. The position pays $141,800 in cash wages. Assume Rick has no dependents. Rick deducts the standard deduction instead of itemized deductions. (Use the tax rate schedules.)

a. What is the amount of Rick's after-tax compensation (ignore payroll taxes)? (Round your intermediate calculations and final answer to the nearest whole dollar amount. Enter deductions as negative amounts).

b-1. Suppose Rick receives a competing job offer of $134,000 in cash compensation and nontaxable (excluded) benefits worth $7,800. What is the amount of Rick's after-tax compensation for the competing offer? (Round your intermediate calculations and final answer to the nearest whole dollar amount. Enter deductions as negative amounts).

b-2. Which job should he take if taxes are the only concern?

• Competing job
• Landscape consultant

Question No. 3

Through November, Cameron has received gross income of $95,000. For December, Cameron is considering whether to accept one more work engagements for the year. Engagement 1 will generate $8,580 of revenue at a cost to Cameron of $4,400, which is deductible for AGI. In contrast, engagement 2 will generate $9,750 of qualified business income (QBI) which is eligible for the 20% QBI deduction. Cameron files as a single taxpayer.

Calculate Cameron's taxable income assuming he chooses engagement 1 and assuming he chooses engagement 2. Assume he has no itemized deductions.

Question no. 4

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Nitai, who is single and has no dependents, was planning on spending the weekend repairing his car. On Friday, Nitai's employer called and offered him $325 in overtime pay if he would agree to work over the weekend. Nitai could get his car repaired over the weekend at Autofix for $234. If Nitai works over the weekend, he will have to pay the $234 to have his car repaired but he will earn $325. Assume Nitai pays tax at a flat 12 percent rate. (Do not round intermediate calculations. Round your answers to 2 decimal places.)

a-1. Strictly considering tax factors, should Nitai work or repair his car if the $234 he must pay to have his car fixed is not deductible?

• Work
• Repair

a-2. Given the answer in a-1 above, by how much is Nitai better or worse off?

Better off or worse off (Please select one) -- Amount ----------------?

Question No. 5
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Jasper and CrewellaDahvill were married in year 0. They filed joint tax returns in years 1 and 2. In year 3, their relationship was strained and Jasper insisted on filing a separate tax return. In year 4, the couple divorced. Both Jasper and Crewella filed single tax returns in year 4. In year 5, the IRS audited the couple's joint year 2 tax return and each spouse's separate year 3 tax returns. The IRS determined that the year 2 joint return and Crewella's separate year 3 tax return understated Crewella's self-employment income, causing the joint return year 2 tax liability to be understated by $6,800 and Crewella's year 3 separate return tax liability to be understated by $6,250. The IRS also assessed penalties and interest on both of these tax returns. Try as it might, the IRS has not been able to locate Crewella, but they have been able to find Jasper.

a. What amount of tax can the IRS require Jasper to pay for the Dahvill's year 2 joint return?

Amount of TAX ----------------?

b. What amount of tax can the IRS require Jasper to pay for Crewella's year 3 separate tax return?

Amount of TAX -----------------------?

Attachment:- Individual Tax Research and Planning.rar