Comprehensive Problem (Tax Return Problem). Rodney and Alice Jones have three sm

Question

Comprehensive Problem (Tax Return Problem). Rodney and Alice Jones have three small children, ranging in age from 5 to 10. One child is blind and needs special care. Rodney works as an accountant for a large CPA firm and has gross income of $45,000. Alice is a lawyer with a national law firm and earns $48,000. Rodney’s parents are quite old, and he and his wife fully support them.

Rodney’s employer provides group-term life insurance at twice the employee’s annual salary. Rodney is 40 years of age.

During 2018, Rodney and Alice receive the following dividends on their jointly held investments:

Dividends from Mexico Inc. (Mexican Corp.) $700

Dividends from Widget Steel Corp. $150

They received interest income from the following investments: Interest on State of Ohio highway bonds $800

Interest on deposits in savings and loans $400

The Joneses have itemized deductions of $25,000. Compute their taxable income. * NOTE: THIS IS FOR 2018*

Explanation / Answer

ANSWER:

Here we have 2 persons namely "Rodney" and "Alice Jones",

We have to determine the Taxable income of above 2 persons

so by using given data we construct a spread sheet to evaluate Taxable income,

1.Taxable income of Rodney:

2.Taxable income for Alice Jones:

Description Income($) Salary 45,000 Dividends from Mesxico Inc(mexcian corp.) /2 700/2 350 Dividends from Widget streetcorp /2 150/2 75 Interest on deposites in savings and loans /2 400/2 200 Interest in the state of ohio highway bonds /2 800/2 400 Gross total income 45,00+350+75+400+200 46,025 Deductions - 0 Taxable income Gross totalincome- deductions=46,025-0 46,025

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