Question

THIS IS WHAT I HAVE SO FAR FOR THIS ASSIGNMENT

For all non-MC work, the default grade for a good submission is B=85%= 5.1 points. To get the max points, the work needs to be aesthetic, professionally presented, and I must learn something new or interesting from reading the optional comment.

Jeremy earned $100,000 in salary and $6,000 in interest income during the year. Jeremy’s employer withheld $11,000 of federal income taxes from Jeremy’s paychecks during the year. Jeremy has one qualifying dependent child who lives with him. Jeremey qualifies to file as head of household and has $23,000 in itemized deductions.

Assume that in addition to the original facts ($106,000 of ordinary gross income), Jeremy sold Amazon shares that he bought for $6,000 on 1/1/18 for $10,000 on 12/31/19. You may use the book chapter 4, PowerPoints, or the IRS instructions to form 1040. https://www.irs.gov/pub/irs-dft/i1040gi--dft.pdf

1. (2.5) What is Jeremy’s tax refund or tax due including the tax on the capital gain? Please show work.

Description	Amount	Computation
1.Gross Income	$110,000	100,000 +6,000 + (10,000-6,000) Salary + interest + 4k profit from stocks
2.AGI deductions	$0
3.Adjusted Gross Income	$110,000	1 – 2(110,000 -0)
4.Standard Deductions	$18,500
5.Itemized Deductions	$23,000
6.Greater Standard or Itemized Deductions	$23,000	5 > 4 (23,000 > 18,500)
7.Taxable Income	$87,000	3 – 6 (110,000-87,000)
8.Income Tax Liability	$13,776	12,696 +(87,000 – 82,5000) * 24%
9.Withholding Tax	$11,000
10.Child Tax Credit	$2,000
11.Income Tax Due	$775	8 – 9 – 10(13,776-11,000-2,000)

2. (0.5) Copy and paste the capital tax gains table that you used to get the capital gains tax rate.

Schedule Z—Head of household If line 3 is: Over— But not over— The tax is: of the amount over— $0 $13,850 $0 + 10% $0 13,850 52,850 1,385 + 12% 13,850 52,850 84,200 6,065 + 22% 52,850 84,200 160,700 12,962 + 24% 84,200 160,700 204,100 31,322 + 32% 160,700 204,100 510,300 45,210 + 35% 204,100 510,300 and greater 152,380 + 37% 510,300

3. (1) Find form 8949 for 2019.   Enter the details of the transaction in Part I or Part II, as appropriate. Assume that the brokerage firm reported both the basis and the sale to the IRS.

4. (1) Find Schedule D for 2019. Please complete Part I and/or Part II. You can skip Part III.

5. (1) Based on your answer to part 1, modify the Form 1040. Please remember to attach Schedule A, in addition to the additional forms and schedules you prepared in this assignment.

6. Optional comment on what you have learned

Answer 1

Plain text calculation on Tax liability / refund . Not updated any FORM 1040  

Answer a)
	Details	Amount $
	Gross Income
	Salary	1,00,000
	Interest Income	6,000
	Gross Income -D	1,06,000
	For AGI Deduction	-
	Adjusted Gross Income	1,06,000
	Standard deduction ( as per 2019 rule)-A	18,350
	Itemized deduction-B	23,000
Less	Greater than above ( A &B)=C	23,000
	Taxable Income(D-E)	83,000
	Income tax Liability=F	12,698
	( $6065
	($83000-$52850)*22%
	12,698
Less	Child Tax Credit ( per 2019 rule )-G	2,000
Less	Tax Withholding -H	11,000
	Tax refund (F-G-H)	-302
As per 2019 , child tax credit rule ,
Maximum credit per child $ 2000
Will be phased by $ 50 per $1000
or proportionate increase in Modified
income of $ 200000
In case of single and head of household
$2000