I need help with parts D & E
d e
Ans D
Expenses | Deduction | Amount of Deduction |
1. Student loan interest paid. | can claim deduction | $ 1,000 |
2. Books. | can claim deduction | $ 1000 |
3. Rent | cannot claim deduction | $ 8,000 |
Total | $ 10,000 |
So, Total Deduction is $ 1,000 + $ 1000= $ 2000
ans E)
Income Items | Inclusion/Exclusion | Amount |
1. Wages. | Included in gross income | $ 30,000 |
2. Employer-provided tuition assistance. | Excluded in gross income | $ 5000 |
3. Scholarship. | Excluded in gross income | $ 2,000 |
4. Student loan proceeds | Included in gross income | $ 5000 |
Total | $ 42000 |
So, Total gross income is $ 30000 + $ 5000= $ 35000
Tarek's tax liability using form 1040
Gross Total Income= Total Gross Income - Total Deduction
=$ 35000 - $ 2000
=$ 33000
Here, Federal income taxes withheld $ 4,000. So. total tax liability is
=Total Gross Income - Standard Deduction
=$ 33000 - $ 12,400
= $ 20600
(here standard deduction for single taxpayer for the year 2020 is $ 12400
Therefor, Total Tax Liability as per the tax bracket for $ 20600 is = ($ 987.5 + 1286.88) = 2274.38
So, Total tax liability is $ 2,274.38 and federal income taxes withheld is $ 4,000.
Hence, Total Tax Refund = Advanced Tax - Total tax liability
=$ 4,000- $ 2,274.38
= $ 1, 725.62
here
TAX RATE | SINGLE | total tax |
---|---|---|
10% | $0 to $9,875 | $ 987.5 |
12% | $9,876 to $20600= 10724 | $ 1286.88 |
Total | $ 2274.38 |
.
I need help with parts D & E d e Continuing Case: Tarek's Financial Journey Tarek's...
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