please compute taxable income?
Hi, help me please Morgan and Maggie are married and have two dependent children. They also fully support Mary's mother who lives with them and has n...
Hi, help me please
Morgan and Maggie are married and have two dependent children. They also fully support Mary’s mother who lives with them and has no income. Their 2006 tax and other related information is as follows:
Total salaries 0,000
Bank account interest income 3,500
Municipal bond interest income 1,500
Value of employer provided medical insurance 3,500
Value of premiums for ,000 of group term life insurance provided by employer 0
Dividend income from ABC stock ,000
Loan from Morgan’s parents ,000
Gift from Morgan’s parents ,000
Gain from the sale of qualified small business stock held more than 5 years ,000
Total itemized deduction ,000
compute Morgan and Maggie’s taxable income
This sounds like a homework assignment. Please do this yourself. Practice makes perfect. When you are done doing it yourself, read the answer below:
$98,000 (assuming tax year is 2006).
$98,500 (assuming tax year is 2005).
Municipal bond, value of med ins., value of GTL < $50K, loans, and gifts are not taxable. The gain from the stock may qualify for special tax preferences, but it is taxable income nonetheless.
If anyone else gets a different answer, let me know what I did wrong.
You’ve got all the information and more. You can do it!
Be brave!
Salaries-Deductions=taxable income
Go buy TAX CUT software and put the numbers in. Do it carefully and you’ll get the right answer for 2005. Shouldn’t be too much different in 2006, maybe a little better due to higher exemptions, etc.
http://www.irs.gov/pub/irs-pdf/f1040.pdf?portlet=3
This is a 1040 form. If you can’t fill it out with the information given, I don’t want you to pass your tax class.