Beruflich Dokumente
Kultur Dokumente
Opening Scenario:
Sue was head of household; Jason was single. Now they are Married filing jointly.
If spouse dies during the tax year: If a spouse dies during the tax year, they are still
considered married in the year of death. (See Whitt Chapter 1 under Single; before MFJ).
Otherwise when not death, look at status on December 31.
HOMEWORK:
Review questions – See my notes in sheet.
Application Questions:
Jay Corp had sales of $6 million, CGS of $3,800,000 and deductible business expenses of
$1,300,000. What is GROSS INCOME; TAXABLE INCOME; GROSS TAX
LIABILITY?
$900,000 taxable income
$306,000 tax (See pg 11-2 for Corporate tax chart)
2) Calculate gross tax liability, average tax rate and marginal tax rate of the following
corporations.
a. $1,200 tax
b. $20,550 tax
c. $272,000 tax
d. $4,275,000 tax
The official answer (verified by the Code--I placed a xerox of the Code in Topic Outline
6:
5) M/M Garcia had AGI of $65,000 consisting of wages & interest income. Itemized
dedns of $25,000. 2 children ages 15 and 22 and both are full-time students (=2 dedns
for kids]. The 22 year old has a p-t job and earned $7,000 of wage income which he
saved. [He’s a full-time student less than 24 so not a problem].
6) Barbara and Mitch are married with no kids. They support his father who lives with
them and is not married. The father has a small part-time BUSINESS repairing clocks.
He had gross receipts from his business of $5,000 and expenses of $2,000. Barbara and
Mitch’s AGI is $84,000 consisting of wages and interest income. Their deductions were
$6,500.
Lynn’s first year of doing business was quite successful. Her gross receipts were $25,000
and her expenses (supplies, training, travel) were $5,400. she had no other income this
year. Her itemized deductions are $2,300. Assume that Lynn is 22 years old, single and
has no dependents and provides over half of her own support.