b) Which of the above items are classified as For AGI and From AGI deductions? c) How would your answers to parts (a) and (b) change if Brandy were an employee rather than self-employed and none of the above expenditures were reimbursed by her employer? 7) On February 20, 2015, Charles, who is single and age 32, establishes a traditional deductible IRA and contributes $5,500 to the account. Charles’ AGI is $66,000 in 2014 and $57,000 in 2015. Charles is an active participant in his employer’s retirement plan.
Can Joe afford the monthly payments with taxes and insurance for either a 30 or 15 year mortgage? 2. If Joe buys the house, will he have enough money left over on a monthly basis to live comfortably? 3. Does Joe have enough in savings to pay for the down payment and all of the closing costs?
Management wants to maintain the finished goods inventory at 30% of the following month's sales. 3. Watson uses four units of direct material in each finished unit. The direct material price has been stable and is expected to remain so over the next six months. Management wants to maintain the ending direct materials inventory at 60% of the following month's production needs.
Based on the assumptions contained in this plan, I estimate that the businesses will break-even in its first year of operations. Cash Flow Statement As the owner of Chagadama Christian Bookstore, I will invest $60,000. This money will be used to cover startup costs of $12,725 and initial operating costs. Fixed costs are limited to our office space and equipment lease at $1,800 per month, which includes a 1,000 square foot store on Main Street, a telephone system, and two photocopiers. As continued positive cash flows permit, the amounts I invested will be repaid.
This year Lionel borrowed $24,000 from Counti Bank and paid interest of $1,440. Lionel used the loan proceeds to pay his law school tuition. Calculate the amounts Lionel can deduct for interest on higher education loans under the following circumstances: a. Lionel’s AGI before deducting interest on higher education loans is $50,000. b. Lionel’s AGI before deducting interest on higher education loans is $69,000. c. Lionel’s AGI before deducting interest on higher education loans is $90,000.
What is Bob's gross income for 2010? Your Answer: $190,000 All $190,000 (the $140,000 salary and the $50,000 bonus) was available to Bob so the bonus must be recognized in 2010 under the doctrine of constructive receipt. When the bonus is physically received in 2011, the $50,000 will have already been taxed and will therefore not be subject to tax again in
Although Wendy mailed the check on December 30, the funds were not made readily available to Larry until January 2. For this reason, Larry will not include the rental amount in his gross income until the next year. The payment was due to Larry on December 31, but he had no way of knowing when the money was readily available or mailed by Wendy, therefore, he cannot include that amount until he receives the check. Alternative B FACTS Both Larry and Wendy are calendar-year, cash method taxpayers. The lease requires an annual rental of $2,000, due in arrears on December 31.
Leasing the building will allow John to write off the payments as rent expense. However, if he has the capital to purchase the building, it would be considered an asset and he would be allowed to depreciate over the life of the building. This decision would have to weigh factors such as: capital investment, loan options if no capital investment, and expected future profits and expenses of the business. 2. Jane Smith tax issues: Issue a) What are the different tax consequences between paying down the mortgage (debt) and assuming a new mortgage (debt) for federal income tax purposes?
She will only take four years to complete her degree. Currently, tuition and housing costs at top private schools total $35,000 per year, which are paid at the beginning of each school year. These expenses are expected to increase at the rate of inflation which will run at 4% annually for the next 25 years. In each year through her 18th birthday, Mary’s parents will make a deposit into the college fund so
*Find out whether you qualify for the income-based repayment program. Under this program, your loan payments could be reduced, based on the amount of discretionary income you have available. In most cases, your loan payments won't exceed 10% of your total income. After 25 years, anything you still owe on the loan will be forgiven. To apply for the program, you'll need to contact the company that's servicing your student loan.