Compute the Summerfields’ itemized deductions. Show your work. Tax Item Amount B
ID: 2593754 • Letter: C
Question
Compute the Summerfields’ itemized deductions. Show your work.
Tax Item
Amount
Bart’s Earnings
$110,000
Betty Ann’s Earnings
$125,000
Federal Tax Withholdings
$22,700
State Income Tax Withholdings
$10,750
FICA & M/C
$17,978
Savings Account Interest (3.0% per year)
$3,200
State Refund from Prior Year
$2,425
Home Mortgage Interest Paid
$12,500
Real Estate Taxes Paid
$24,000
Charitable Contributions
$3,000
Unreimbursed Medical Expenses
$1,800
Stock Ownership: United Motor Company (purchased 9 months ago & which they still hold)
Current Value: $4,000
Cost basis: $8,000
Whole Life Insurance Policy
Face Value: $1,000,000
Cash Value: $15,000
Owner: Bart
Beneficiary: Betty Ann
Insured: Bart
Policy Dividend: $300
Tax Item
Amount
Bart’s Earnings
$110,000
Betty Ann’s Earnings
$125,000
Federal Tax Withholdings
$22,700
State Income Tax Withholdings
$10,750
FICA & M/C
$17,978
Savings Account Interest (3.0% per year)
$3,200
State Refund from Prior Year
$2,425
Home Mortgage Interest Paid
$12,500
Real Estate Taxes Paid
$24,000
Charitable Contributions
$3,000
Unreimbursed Medical Expenses
$1,800
Stock Ownership: United Motor Company (purchased 9 months ago & which they still hold)
Current Value: $4,000
Cost basis: $8,000
Whole Life Insurance Policy
Face Value: $1,000,000
Cash Value: $15,000
Owner: Bart
Beneficiary: Betty Ann
Insured: Bart
Policy Dividend: $300
Explanation / Answer
Itemised deductions:
unreimbursed medical expenses less than 10% of AGI, hence no deduction available.
FICA and medicare taxes can not be itemised.
State refund from last year is considered seperately on 1040.
State taxes 10,750 Home mortagage interest 12,500 Real estate taxes 24,000 Charitable contributions 3,000 50,250Related Questions
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