Rob (age 50) and Susan (age 49) Cowen are married. Susan works as a retail manag
ID: 2760353 • Letter: R
Question
Rob (age 50) and Susan (age 49) Cowen are married. Susan works as a retail manager and Rob is a self-employed electrician but does not maintain a home office. Their 2015 tax and other information are as follows:
Salary – Susan
65,000
Federal withholding on salary
20,000
State withholding on salary
3,000
Interest income on municipal bonds:
State of Connecticut
2,000
Savings account interest
900
Dividends from RGR, Inc. (all are non-qualified)
5,000
Value of employer provided medical insurance
2,000
Inheritance from Susan’s father’s estate
7,000
Interest paid on personal car loan
800
Interest paid on personal loan
1,500
Child support paid to Rob’s ex-wife
12,000
Alimony paid to Rob’s ex-wife
5,000
Qualified Out of Pocket Medical Expenses
3,000
Donations to church
Real Estate taxes on primary residence
1,500
7,000
Mortgage interest on primary residence (<$1M)
5,000
Rob’s business revenues
55,000
Rob’s business expenses
15,000
Required: Using the tax formula format, determine the following for the Cowen’s 2015 tax year (show all calculations):
All Income $___________
Exclusions (if any) $ ___________
Gross income (including Rob’s SE income) $ ___________
Deductions For AGI $ ___________
Adjusted gross income $ ___________
Itemized deduction or standard deduction amount $ ___________
Deduction for exemptions $ ___________
Taxable income $ ___________
Income tax liability $ ___________
Self-employment tax liability $ ___________
Net tax due or refund (show calculation) $ ___________
Salary – Susan
65,000
Federal withholding on salary
20,000
State withholding on salary
3,000
Interest income on municipal bonds:
State of Connecticut
2,000
Savings account interest
900
Dividends from RGR, Inc. (all are non-qualified)
5,000
Value of employer provided medical insurance
2,000
Inheritance from Susan’s father’s estate
7,000
Interest paid on personal car loan
800
Interest paid on personal loan
1,500
Child support paid to Rob’s ex-wife
12,000
Alimony paid to Rob’s ex-wife
5,000
Qualified Out of Pocket Medical Expenses
3,000
Donations to church
Real Estate taxes on primary residence
1,500
7,000
Mortgage interest on primary residence (<$1M)
5,000
Rob’s business revenues
55,000
Rob’s business expenses
15,000
Explanation / Answer
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