Question

Graded assignment 5 Gerald and Patty Hanson are married taxpayer with the following income and expenses for 2018: . Gerald's w-2 wages: $80,000 . Patty's w-2 wages: 40,000 . Patty's sole proprietorship (Patty is a noted sculptor) Sales$20,000 o Materials (8,000) Depreciation (1,000) Interest income on their investments $5,000 Dividend income 500 I ditional, Gerald and at in Prescription drugs (after insurance) $450 . Vitamins 100 . Medical insurance premiums 1,350 . Braces for their son (not covered by insurance) 1,500 Clinic and hospital bills (after insurance) 800 Property taxes on home 5,000 State income taxes o Withheld from their w-2 6,000 o Estimated payments 400 . Federal income taxes withheld 30,000 State and local sales tax paid on new personal auto 1,000 . View as Page

Answer 1

Statement of Income & Expenses for 2018 Expenses Materials Depreciation Prescription druges Vitamines Medical Insurance Premiums $ 1,350 Dividend income Braces Clinic & hospital bills Property taxes on home Taxes Federal Income Taxes State & Local Sales Tax Interest on home Mortgage 10,000 Interest paid on Credit Card $ 2,400 Cash to Church ABC Stock Donation CPA License Amount Income $ 8,000 Wages Gerald $1,000 Wages Patt Amount $80,000 $ 40,000 $ 20,000 $5,000 $450 Sales $100 Interest on Investement 500 $ 1,500 800 $ 5,000 $ 6,400 S30,000 $ 1,000 $ 3,000 $ 12,000 $ 5,000 300 Balance $ 57,200 Total $145,500 145,500 Answers: (1) Adjusted Gross Income for 2018 $ 145,500 (2) Itemized deduction (refer above table) Total Cost $ 88,300 (3) Taxble Income: Wages - Gerald Wages Pa Interest on Investement Total Less Donation Total Taxable Income Dividend is not taxable income S80,000 S40,000 $ 5,000 $125,000 $ (5,000 $120,000