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# 1. Ahmed does not have enough cash on hand to pay his taxes.

### Customer Question

1.
Ahmed does not have enough cash on hand to pay his taxes. He was excited to hear that he can request an extension to file his tax return. Does this solve his problem? What are the ramifications if he doesn't pay his tax liability by April 15?

2.
Jamarcus, a full-time student, earned \$2,500 this year from a summer job. He had no other income this year and will have zero federal income tax liability this year. His employer withheld \$300 of federal income tax from his summer pay. Is Jamarcus required to file a tax return? Should Jamarcus file a tax return?

Chapt 3--HW TAX4001 2013e
1.

Manny, a calendar-year taxpayer, uses the cash method of accounting for his sole proprietorship. In late December he performed \$21,700 of legal services for a client. Manny typically requires his clients to pay his bills immediately upon receipt. Assume Manny’s marginal tax rate is 40 percent this year and next year, and that he can earn an after-tax rate of return of 9 percent on his investments.

a. What is the after-tax income if Manny sends his client the bill in December? (Omit the "\$" sign in your response.)

After-tax income \$

b. What is the after-tax income if Manny sends his client the bill in January? (Round "PV Factor" to 3 decimal places. Round your intermediate calculations and final answer to the nearest whole dollar amount. Omit the "\$" sign in your response.)

After-tax income \$

c. Based on requirement a and b, should Manny send his client the bill in December or January?

Send in December

Send in January

2.

Assume Ellina earns a 11 percent after-tax rate of return, and that she owes a friend \$3,000.

Would she prefer to pay the friend \$3,000 today or \$4,000 in ten years?

3,000 today

4,000 in ten years

3

Tawana owns and operates a sole proprietorship and has a 35 percent marginal tax rate. She provides her son, Jonathon, \$9,600 a year for college expenses. Jonathon works as a pizza delivery person every fall, and has a marginal tax rate of 11 percent.

a. What could Tawana do to reduce her family tax burden?

Employ her son in her sole proprietorship

Ask Jonathon to find a new job

Start a new enterprise

b. How much pretax income does it currently take Tawana to generate the \$9,600 after taxes given to Jonathon? (Round your answer to the nearest whole dollar amount. Omit the "\$" sign in your response.)

Pretax income \$

c. If Jonathon worked for his mother’s sole proprietorship, what salary would she have to pay him to generate \$9,600 after taxes (ignoring any Social Security, Medicare, or self-employment tax issues)? (Round your answer to the nearestwhole dollar amount. Omit the "\$" sign in your response.)

Salary \$

d. How much money would this strategy save? (Round your intermediate calculations and final answer to the nearest whole dollar amount. Omit the "\$" sign in your response.)

This strategy will save Tawana \$ pretax and \$ after tax.

Chapt 4--HW TAX4001 2013e

Jeremy earned \$107,500 in salary and \$12,900 in interest income during the year. Jeremy has one qualifying dependent children who live with him. He qualifies to file as head of household and has \$26,100 in itemized deductions. Neither of his dependents qualifies for the child tax credit. (Use the tax rate schedules.)

a. Use the 2012 tax rate schedules to determine Jeremy’s taxes due. (Leave no cells blank - be certain to enter "0" wherever required. Input all amounts as positive values. Do not round intermediate calculations. Round final answers to the nearest whole dollar amount.)

Description Amount
(1) Gross income \$

(2) For AGI deductions

________________________________________ ________________________________________

(4) Standard deduction

(5) Itemized deductions

(6) of standard deductions or itemized deductions

(7) Personal and dependency exemptions

(8) Taxable income \$

Income tax liability \$

________________________________________

b. Assume that in addition to the original facts, Jeremy has a long-term capital gain of \$5,800. What is Jeremy’s tax liability including the tax on the capital gain (use the tax rate schedules rather than the tax tables)? (Leave no cells blank - be certain to enter "0" wherever required.Input all amounts as positive values. Do not round intermediate calculations. Round final answers to the nearest whole dollar amount.)

Description Amount
(1) Gross income \$

(2) For AGI deductions

________________________________________ ________________________________________

(4) Standard deduction

(5) Itemized deductions

(6) of standard deductions or itemized deductions

(7) Personal and dependency exemptions

(8) Taxable income \$

Income tax liability \$

________________________________________

c. Assume the original facts except that Jeremy had only \$7,200 in itemized deductions. What is Jeremy’s total income tax liability (use the tax rate schedules rather than the tax tables)? (Leave no cells blank - be certain to enter "0" wherever required. Input all amounts as positive values. Do not round intermediate calculations. Round final answers to the nearest whole dollar amount.)

Description Amount
(1) Gross income \$

(2) For AGI deductions

________________________________________ ________________________________________

(4) Standard deduction

(5) Itemized deductions

(6) of standard deductions or itemized deductions

(7) Personal and dependency exemptions

(8) Taxable income \$

Income tax liability \$

2.

Through November, Tex has received gross income of \$285,000. For December, Tex is considering whether to accept one more work engagement for the year. Engagement 1 will generate \$7,500 of revenue at a cost of \$5,750, which is deductible for AGI. In contrast, engagement 2 will generate \$7,500 of revenue at a cost of \$4,500, which is deductible as an itemized deduction. Tex files as a single taxpayer.

a. Calculate Tex’s taxable income assuming he chooses engagement 1 and engagement 2 separately. Assume he has no itemized deductions other than those generated by engagement 2.

Engagement 1 Engagement 2
Taxable income \$
\$

________________________________________

b. Calculate Tex’s taxable income assuming he chooses engagement 1 and engagement 2 separately. Assume he has \$5,410 of itemized deductions other than those generated by engagement 2.

Engagement 1 Engagement 2
Taxable income \$
\$

________________________________________

c. Calculate Tex’s taxable income assuming he chooses engagement 1 and engagement 2 separately. Assume he has \$9,100 of itemized deductions other than those generated by engagement 2.

Engagement 1 Engagement 2
Taxable income \$
\$

Chap 5--HW TAX4001 2013e

L. A. and Paula file as married taxpayers. In August of this year, they received a \$5,730 refund of state income taxes that they paid last year.

How much of the refund, if any, must L. A. and Paula include in gross income under the following independent scenarios? Assume the standard deduction last year was \$11,600. (Leave no cells blank - be certain to enter "0" wherever required. Omit the "\$" sign in your response.)

a. Last year L. A. and Paula had itemized deductions of \$9,000, and they chose to claim the standard deduction.

Refund to be included \$

b. Last year L. A. and Paula claimed itemized deductions of \$30,000. Their itemized deductions included state income taxes paid of \$8,190.

Refund to be included \$

c. Last year L. A. and Paula claimed itemized deductions of \$15,050. Their itemized deductions included state income taxes paid of \$12,000.

Refund to be included \$

2.

For each of the following independent situations, indicate the amount the taxpayer must include in gross income: (Leave no cells blank - be certain to enter "0" wherever required. Omit the "\$" sign in your response.)

a. Phil won \$740 in the scratch-off state lottery. There is no state income tax.

Amount to be included \$

b. Ted won a compact car worth \$20,300 in a TV game show. Ted plans to sell the car next year.

Amount to be included \$

c. Al Bore won the Nobel Peace Prize of \$687,500 this year. Rather than take the prize, Al designated that the entire award should go to Weatherhead Charity, a tax-exempt organization.

Amount to be included \$

d. Jerry was awarded \$3,600 from his employer, Acme Toons, when he was selected most handsome employee for Valentine’s Day this year.

Amount to be included \$

e. Ellen won a \$1,390 cash prize in a school essay contest. The school is a tax-exempt entity, and Ellen plans to use the funds to pay her college education.

Amount to be included \$

f. Gene won \$460 in the office March Madness pool.

Amount to be included \$

3.

For each of the following situations, indicate how much the taxpayer is required to include in gross income: (Leave no cells blank - be certain to enter "0" wherever required. Omit the "\$" sign in your response.)

a. Steve was awarded a \$9,700 scholarship to attend State Law School. The scholarship pays Steve’s tuition and fees.

b. Hal was awarded a \$24,700 scholarship to attend State Hotel School. All scholarship students must work 15 hours per week at the School residency during the term.

c. Bill was the recipient of an athletic scholarship that pays his \$14,500 tuition to State University and provides him with a \$1,440 per month stipend to pay for food and housing. The scholarship requires Bill to participate in athletic competition each term.

a. How much of scholarship is Steve required to include in his gross income?

Amount to be included \$

b. What is the amount of scholarship Hal should include in his gross income?

Amount to be included \$

c. How much of scholarship and stipend are to be included in Bill's gross income?

Amount of scholarship to be included \$

Amount of stipend to be included \$

Chapt 6--HW TAX4001-2013e

Clem is married and is a skilled carpenter. Clem's wife, Wanda, works part-time as a substitute grade school teacher.

Determine the amount of Clem's expenses that are deductible for AGI this year (if any) under the following circumstances: (Leave no cells blank - be certain to enter "0" wherever required. Round your answers to the nearest dollar amount. Omit the "\$" sign in your response.)

a. Clem is self-employed and this year he incurred \$1,005 for tools and supplies related to his job. Since neither were covered by a qualified health plan, Wanda paid health insurance premiums of \$4,570 to provide coverage for herself and Clem.

Deductible amount for AGI \$

b. Clem and Wanda own a garage downtown that they rent to a local business for storage. This year they incurred \$1,750 in utilities and depreciation of \$1,225.

Deductible amount for AGI \$

c. Clem paid self-employment tax of \$14,400 and Wanda had \$5,700 of Social Security taxes withheld from her pay. The employer portion of Clem's self-employment tax is \$8,281.

Deductible amount for AGI \$

d. Clem paid \$131 to rent a safe deposit box to store his coin collection. Clem has collected coins intermittently since he was a boy, and he expects to sell his collection when he retires.

Deductible amount for AGI \$

Simpson is a single individual who is employed full-time by Duff Corporation. This year Simpson reports AGI of \$71,600 and has incurred the following medical expenses:

Dentist charges \$ 1,700
Physician's charges 2,670
Optical charges 995
Cost of eyeglasses 750
Hospital charges 2,500
Prescription drugs 425
Over-the-counter drugs 700
________________________________________

a. Calculate the amount of medical expenses that will be included with Simpson's itemized deductions after any applicable limitations. (Omit the "\$" sign in your response.)

Medical expenses \$

b. Suppose that Simpson was reimbursed for \$890 of the physician's charges and \$2,030 for the hospital costs. Calculate the amount of medical expenses that will be included with Simpson’s itemized deductions after any applicable limitations. (Omit the "\$" sign in your response.)

Medical expenses \$

Chapt 7--HW TAX4001 2013e

In 2012, Carson is claimed as a dependent on his parent's tax return. His parents' ordinary income marginal tax rate is 28 percent. Carson's parents provided most of his support.

What is Carson's tax liability for the year in each of the following alternative circumstances?

a. Carson is 17 years old at year-end and earned \$12,150 from his summer job and part-time job after school. This was his only source of income. (Omit the "\$" sign in your response.)

Tax liability \$

b. Carson is 23 years old at year-end. He is a full-time student and earned \$12,150 from his summer internship and part-time job. He also received \$6,900 of qualified dividend income. (Omit the "\$" sign in your response.)

Tax liability \$

2.

Kyle worked as a free-lance software engineer for the first three months of 2012. During that time, he earned \$55,500 of self-employment income. On April 1, 2012, Kyle took a job as a full-time software engineer with one of his former clients, Hoogle Inc. From April through the end of the year, Kyle earned \$71,000 in salary.

What amount of FICA taxes (self-employment and employment-related) does Kyle owe for the year? (Round your intermediate and final answer to the nearest dollar amount. Omit the "\$" sign in your response.)

Self-employment/FICA tax \$

3.

In 2012, Elaine paid \$2,200 of tuition and \$540 for books for her dependent son to attend State University this past fall as a freshman. Elaine files a joint return with her husband.

What is the maximum American opportunity credit that Elaine can claim for the tuition payment in each of the following alternative situations? (Leave no cells blank - be certain to enter "0" wherever required. Round your intermediate calculations and final answers to the nearest whole number. Omit the "\$" sign in your response.)

a. Elaine’s AGI is \$98,750.

American opportunity credit \$

b. Elaine’s AGI is \$162,500.

American opportunity credit \$

c. Elaine’s AGI is \$194,000.

American opportunity credit \$
Submitted: 1 year ago.
Category: Multiple Problems
Expert:  Mr. Gregory White replied 1 year ago.
Hello and thanks so much for the request.

This is pretty extensive and will take me some time to put together - what is the deadline for the resource?

Since it is so extensive (compared to normal) I would ask that you consider a bonus after rating my answer if satisfied with my help.

:-)
Customer: replied 1 year ago.

Tonight any time 2 AM Easter Standard Time if it is okay with you and please highlight answered or explained answered when needed. Yes bonus point defetnetly.

Expert:  Mr. Gregory White replied 1 year ago.
Thanks for updating,

Unfortunately this is too extensive for me to complete by your stated deadline.

I will opt out and move to the top of the list and message a couple of others who might have the time to help.

Someone should be with you shortly.

:-)
Customer: replied 1 year ago.

Teacher Greg, I really will like for you to help me can you do it by Sunday night. I just requested an extension?

Customer: replied 1 year ago.

please let me know if you received my previous update. Monday is a good day. I was extended by my professor until then. just confirm please.

Customer: replied 1 year ago.

Teacher Greg I wan to cancel my request since I have not hear from anybody and I needed to hear from somebody to know what to expect. Can you tell me how to go about the cancellation.

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