14000 Jericho Park Road, Bowie, MD 20715. Carol, 19 years old, is a full-time st

Question

14000 Jericho Park Road, Bowie, MD 20715. Carol, 19 years old, is a full-time student at Bowie State University. Bob works as a design engineer for a manufacturing firm while Jane runs a craft business from their home. Jane's craft business consists of making craft items for sale at the Bowie State University Bookstore. Jane spends considerable time and effort on her craft business and it Bob and Jane Doe are married and have one dependent child, Carol. They reside at Jane own a home and pay interest on their home loan (balance of $220,000) and a personal loan to Carol's college expenses. Neither Bob nor Jane are plan to file as married joint. pay blind or over age 65, and they Bob and Joan have summarized the income and expenses they will report this year as shown below. Requirements for tax year 2016: A. Prepare a line-by-line analysis that reveals their taxable income and taxes owed or refund due for the year. Use p. 3-3 of the textbook as a mondel. B. Attached a copy of the income and expenditures given below C. Prepare pages 1 and 2 of Form 1040, and Schedules A, C, and SE (page 1 only) D. Print and sign your name as the tax prepare, on p. 2 of Form 1040 E. Staple, in the left-hand corner, the submission, in the following order: The problem and data Line-by-line analysis Form 1040, followed by the supporting schedules, in numerical order .

Explanation / Answer

SINCE , BOTH ARE NOT BLIND OR NEITHER OF THEM IS ABOVE 65.NAD JANE IS EARNING FROM HER PERSONAL SKILLS SO THEY BOTH ARE TAXED INDIVIDUALLY FOR TAX PURPOSE.

CALCULATION OF TAX INDIVIUALLY:

BOBS TAXABLE INCOME:

INCOME EARNED

(a)BOBS SALARY =$134,200

ADD:INEMPLOYMENT PAYMENTS =$3570

TOTAL INCOME =$137770

LESS: EXPENSES

FEDERAL INCME TAX WITHHELD FROM BOB WAGES =$15,200

STATE INCOME TAXES WITHHELD FROM BOB WAGES=$6100

SOCIAL SECURITY TAXES WITHHELD FROM BOB WAGES =$8320

BOB PAID ALIMONY TO HIS EX WIFE =$6500

BAB PAID EXPENSES TO EX WIFE FOR HIS CHILDREN =$7500

TOTAL EXPENSES = $43,620

NET INCME UNDER HEAD SALARY =$94150

(B)INCME UNDER HEAD PGBP(JANE)

INCOME:

JANE CRAFT SALES =$16200

LESS: EXPENSES

TRAVEL EXPENSES RELATING TO CRAFT SHOWS =$2785

SALES TAX PAID =$3954

EMPLYEE EXPENES =$2100

COST OF CRAFTS =$3250

POSTGE COST =$175

NET INCOME UNDER HEAD PGBP =$3936

(C)INCOME UNDER HEAD HOUSE PROPERTY

REAL ESTATE TAX PAID ON RESIDENCE =$9540 NET INCME UNDER HEAD HOUSE PROPERTY ($9540)

(D) INCOME UNDER HEAD CAPITAL GAINS = NIL

(E) INCOME FROM OTHER SOURCES

INCOME:

INTERSET FROM SAVING DEPOSITS =$550

INTEREST FROM US TRESAURY BOND FUNDS =$625

INTEREST FROM MUNICIPAL BONDS = $1810

BAB GAMLING WIN =$850

LESS:

HOME MORTAGE INTEREST PAID =$12750

INT ON MASTER CARD = $850

MEDICAL EXPENSES = $2975

INTEREST PAID ON STUDENT LOANS FOR CAROL = $1890

CASH TO RED SOCIETY =$3200

JANE GAMBLING LOSSES =$1100

NET INCOME UNDER THIS HEAD =($19780)

AS TOTAL TAXABLE INCOME WILL BE &$68766

HENCE AAL FURTHER PARTS OF QUESTION ARE OF STUDENT HIMSELF NAD INVOVES PHYSICAL DOCUMENTS

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