1. Mark is a lawyer who lives and practices law in Minneapolis. During 2015, Mar

Question

1. Mark is a lawyer who lives and practices law in Minneapolis. During 2015, Mark takes his family (wife and 1 child) to Florida (plane tickets are $270 per person) where they stay while Mark attends a legal conference for three days. The remaining two days they spend at the beach. The hotel room costs $140 per night and meals are $85 per day total for the three of them. Mark also tracks his mileage on his car that is used for personal and business purposes. 4500 miles are for commuting from home to his office downtown. 3215 miles are spent driving from his office to various client locations for meetings. Mark also has the receipts for many of the lunches that he takes his clients to. He usually takes them to the country club where he has a membership. The membership costs Mark $1,400 per year and he spent $1,260 in lunches at the country club. These lunches involve some discussion of a legal issue and Mark has kept a record of these lunches. None of these expenses are reimbursed by Mark’s employer.

Which of the expenses listed above would be deductible by Mark and how much would be deductible (ignore any 2% floor)?

2. Joe and Jill Hausman's AGI for the year is $123,600 and they have 3 children under 16. They have itemized deductions of 22,500. What is their final tax liability for 2015 after credits?

3. What is the amount of non refundable dependent care credit allowed Sally Smith, a divorcee, who pays $3,600 for the year to send her one 4 year old daughter to a babysitter while she works?   What would her earned income credit be? Sally’s only income is $22,500 from her secretary job.

Explanation / Answer

ANSWER1 students child and dependent care: • Tax credit for work-related dependent care expenses • Have a qualifying person • Credit is 20%-35% of qualifying expenses (maximum of $3000 expenses for one parent)

so. credit allowed is 35%of 3000 i.e $1050

Q.Joe and Jill Hausman's AGI for the year is $123,600 and they have 3 children under 16. They have itemized deductions of 22,500. What is their final tax liability for 2015 after credits?

ANSWER 2 × $1,000 = $2,000. Children age 17 and above do not qualify for the credit.

SO FINAL TAX LIABILITY IS 22500-2000=20500

answer 2 $10645

Related Questions

Navigate

• Browse (All)
• Browse 1
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.