Evaluate taxable income and the income tax liability

Assignment Help Taxation

Reference no: EM133567

Question :

1. For each of the subsequent taxpayers, evaluate (1) the income tax liability (2) taxable income (before credits or prepayments). Be sure to add the new Medicare taxes, if applicable. Also, don't forget about the phase-out of itemized deductions and exemptions, if appropriate.

- Jane is single with one dependent child. Jane has the subsequent sources of income-

- Salary $180,000

- Taxable interest income $ 15,000

Jane has itemized deductions (mortgage interest, charitable contributions and taxes) that total $20,000.

- George is solitary with two dependent children. George has salary of $50,000 and does not have sufficient itemized deductions (taxes of $3,500 and charitable contributions of $1,000) to be able to itemize.

- Jessica is single and has no dependents. Her salary was $150,000 and she had dividend income of $10,000 (all capable dividend income). Jessica has itemized deductions (taxes and charitable contributions) that total $12,000.

2. Referring to #1 above, suppose that Jane and George were married at the end of 2013. Evaluate (1) taxable income and (2) the income tax liability (before credits or prepayments) on a joint return. Be sure to add the new Medicare taxes, if applicable. Also, don't forget about the phase out of itemized exemptions and deductions, if applicable.

3. Referring to #1 above, suppose that Jane and Jessica were married at the end of 2013. calculate (1) taxable income and (2) the income tax liability (before prepayments or credits) on a joint return. Be sure to add the new Medicare taxes, if applicable. Also, don't forget about the phase-out of itemized deductions and exemptions, if appropriate.

Reference no: EM133567

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