Question

Richard McCarthy (born 2/14/1965; Social Security number 100-10-9090) and Christine McCarthy (born 6/1/1967; Social security number 101-21- 3434) have a 19-year-old son (born 10/2/2000 Social Security number 555-55-1212), lack who is a full-time student at the University of Key West. The McCarthys also have a 12-year-old daughter (Social Security number 444-23-1212). Justine, that lives with them. The McCarthys can daima $2,000 child tax credit for Justine and a $500 other dependent credit for Jack. Richard is the CEO at a paper company. His Form W-2 is provided. Christine is an optometrist and operates her own practice ("The Eyes of March") in town as a sole proprietor. The shop address is 1030 Morgan Highway, Clarks Summit, PA 18411 and the business code is 621320. Christine keeps her books on the accrual basis and her bookkeeper provided the following information: Gross sales $270,541 8,994 Returns Inventory: Beginning inventory Purchases Ending inventory Rent $24,000 120.000 30,000 24,000 11,019 Insurance 2.998 37,113 Professional fees Payroll Payroll taxes 2,077

Answer 1

Find below the Computation of Total Income of Mr. Richard McCarthy

Computation of Total income of Mr.Richard McCarthy
DOB : - 14.02.1965
Social Security No. 100-10-9090
for the year 2019
Particular	Amount	Amount	Amount
Gross Sales		$270,541
Less : -Returns		$8,994	$261547
Interest Income			$23,467
			$285,014
Inventory
Op	$24,000
Purchase	$120,000
Cl	$30,000	$114000
Rent		$24000
Insurance		$11019
Professional Fees		$2998
Payroll		$37113
Payroll Taxes		$2877
Housekeeping exp		$12600
Unemployment Tax		$378
Home Interest		$15,661
Proprty Tax		$5,436
Charitable Contribution		$7,600	$233682
Taxable Income			$51,332
Tax on above			$7,083
Less :- Total Credits
Estimated State income tax payments		$2,400
Estimated Federal income tax payment		$10,500
State Income Tax Exp		$761
Justince Child Tax Credit		$2,000
Kack Child Tax Credit		$500	$16,161
Tax Payable /(Refundable)			($9,078)

The Extract of various Schedule of Form no. 1040 are as follows according to Each Schedule

Schedule 1 & Schedule C
Particular	Amount	Amount
Gross Sales		$270,541
Less :- Returns		$8,994
		$261,547
Consumption
Op Balance Material	$24,000
Add : -Purchase	$120,000
Less :- Cl Balance Material	$30,000	$114,000
Rent		$24,000
Insurance		$11,019
Professional Fees		$2,998
Payroll		$37,113
Payroll Tax		$2,877
Net Income From Business		$69,540
Schedule 2
Additonal Tax Details
Proprty Tax		$5,436
Estimated State income tax payments		$2,400
Estimated Federal income tax payment		$10,500
State Income Tax Exp		$761
		$19,097

Schedule 3
Particular	Amount	Amount
Justince Child Tax Credit		$2,000
Kack Child Tax Credit		$500
Tax Refundable		$ 9083
		$11,583
Schedule A
Charitable Contribution		$7,600
Total		$7,600
Schedule B
Interest Income		$23,467
Schedule SE
Tax on Total Income		$7,083
Form 8959		0
Form 8960		0

The Assumption:- 1) Mr.Richard Mccarthy filled his return after taking into account the income of his 12 year Daughter & 19year old Son. It is assumed that both were dependend on him. Though Son's age is 19 year it is presume that his income is clubbed in to his (Mr.Richards's hand) hand & hence accordingly he also take credit of State Income Tax & Federal Income of Tax on his Son's Income. 2) Estimated State Income tax & Estimated Federal Income Tax presumed to be paid & hence eligible for Credit. 3) Total Tax which is calculated on his Total Taxable Income is presumed to paid by him and hence shown in Schedule SE 4) Tax Refund of $ 9078 can be shown under Schedule 3.