Question

Jack and Jill Brady are married. Jack is 42 years old and a design engineer for a manufacturing company. Jill is 45 years old and runs a craft business from their home. Jill spends considerable time and effort on her craft business and it has been consistently profitable over the years. The Brady’s have one child Julia, age 16. Julia is a high school student and works for a landscaping business during the summer—she earned $5,500 in 2018

Income:

Jacks Salary $121,883

Jills Craft sales $18,400

Interest from certificate of deposit $716

Interest income from US Treasury Bond $1650

Interest income from Municipal Bond $920

Expenditures:

Mortgage Interest on principal residence $13,700

Real Property Taxes on residence $6,200

Vehicle property tax based upon value $475

State Sales Tax $750

Unreimbursed medical expense $2400

Unreimbursed employee business expenses for Jack $1500

Interest on Credit Cards $650

Contribution to American Red Cross $500

Contribution to Veterans of Foreign War $325

Calculate AGI, Deductions and Itemized Deductions

Answer 1

Hi Let me know in case you face any issue: Answer are highlighted in yellow: olution: Particulars Amount Jacks Salary Jills Craft sales Interest from certificate of deposit Interest income from US Treasury Bond 716 1650 Interest income from Municipal Bond ax exem Gross Income 142649 Less: Deductions for AGI 0 AGI 142649 Deductions and itemized deductions: Standard Deductions (In year 2018 for MFJ) 24000 Mortgage Interest on principal residence Real Property Taxes on residence Vehicle property tax based upon value (Not allowed) 13700 6200 0 State Sales Tax 750 Unreimbursed medical expense Unreimbursed employee business expenses for Jack (less than 7.5% of AGI) (Eliminated) 0 (Not allowed) Interest on Credit Cards Contribution to American Red Cross 500 Contribution to Veterans of Foreign War 325 Itemized Deductions 21475 Greater of Standard or itemized deductions is opted by taxpayers