Posted: May 28th, 2015

28. Compute 2014 taxable income in each of the following independent situations.

28. Compute 2014 taxable income in each of the following independent situations.

a. Drew and Meg, ages 40 and 41 respectively, are married and file a joint return. In addition to four dependent children, they have AGI of $65,000 and itemized deductions of $15,000.

b. Sybil, age 40, is single and supports her dependent parents, who live with her. Sybil also supports her grandfather, who lives in a nursing home. She has AGI of $80,000 and itemized deductions of $8,000.

c. Scott, age 49, is a surviving spouse. His household includes two unmarried stepsons who qualify as his dependents. He has AGI of $58,000 and itemized deductions of $9,500.

d. Amelia, age 33, is an abandoned spouse and maintains a house hold for her three dependent children. She has AGI of $58,000 and itemized deductions of $9,500.

e. Dale, age 42, is divorced but maintains the home in which he and his daughter, Jill, live. Jill is single and qualifies as Dale’s dependent. Dale has AGI of $64,000 and itemized deductions of $9,900.

45. Which of the following individuals are required to file a 2014 Federal income tax return? Should any of these individuals file a return even if filing is not required? Why or why not?

a.    Patricia, age 19, is a self-employed single individual with gross income of $5,200 from an unincorporated business. Business expenses amounted to $4,900.

b.    Mike is single and is 67 years old. His gross income from wages was $10,800.

c.    Ronald is a dependent child under age 19 who received $6,500 in wages from a part-time job.

d.    Sam is married and files a joint return with his spouse, Lana. Both Sam and Lana are 67 years old. Their combined gross income was $22,750.

e.    Quinn, age 20, is a full-time college student who is claimed as a dependent by his parents. Quinn reports taxable interest and dividends of $2,500.