Reference no: EM132670797
Steve (age 40) and Edie (age 39) Brady are married. Steve works as a retail manager and Edie is a self-employed architect but does not maintain a home office. She does NOT qualify for the Qualified Business Income (QBI) deduction. Their 2019 tax and other information are as follows:
Salary - Steve 70,000
Federal withholding on salary 10,000
State withholding on salary 4,000
Interest income on municipal bonds:
State of Connecticut 1,000
Savings account interest 1,500
Dividends from RGR, Inc. (all are non-qualified) 2,500
Value of employer provided medical insurance 3,000
Inheritance from Steve's father's estate 9,000
Interest paid on personal car loan 1,800
Interest paid on personal loan 1,100
Child support paid to Steve's ex-wife 10,000
Alimony paid to Steve's ex-wife - divorced in 2010 8,000
Qualified Out of Pocket Medical Expenses 3,700
Donations to church
Real Estate taxes on primary residence 2,200
6,000
Mortgage interest on primary residence (<$1M) 4,000
Edie's business revenues 58,000
Edie's business expenses 25,000
Required:
Problem 1: Using the tax formula format, determine the following for the Brady's 2019 tax year (show all calculations):
- All Income $___________
- Exclusions (if any) $ ___________
- Gross income (including Edie's SE income) $ ___________
- Deductions For AGI $ ___________
- Adjusted gross income $ ___________
- Itemized deduction or standard deduction amount $ ___________
- Deduction for exemptions $ ___________
- Taxable income $ ___________
- Income tax liability $ ___________
- Self-employment tax liability $ ___________
- Net tax due or refund (show calculation)