Question

. Determine the maximum deduction from AGI for 2019 for each of the fol-lowing taxpayers:
a. Selen is single and has itemized deductions for the year of $12,400. In ad-dition, Selen’s mother lives with her, but she does not claim her mother as a dependent.
b. Amanda and Adam are married. Amanda is 67 years old and is legally blind. Adam is 64 years old. They have itemized deductions of $25,800.
c. Micah and Ilana are married and have two children. In April, they have an argument and Micah leaves Ilana. At year-end, Ilana is unaware of Micah’s whereabouts, and no formal divorce proceedings have been initiated. Ilana’s itemized deductions total $14,000.
d. Constantino is divorced and maintains a home for his 25-year-old daughter, who is a graduate student at a local university and earns $6,800 during the year. His itemized deductions are $12,800.
e. Helen is 69 and a widow. Her 20-year-old grandson, who is a full-time student at the local university, lives with her for the entire year. Her husband, Sam, dies in 2018 at the age of 71. Her itemized deductions are $14,000.
f. Assume the same facts as in part e, except that Sam dies in 2019.

Answer 1

a. As per IRS Tax Rules 2019, Selen would be considered single and standard deduction applicable is $ 12,200.

If Helen wants to file her return as head of household, her mother need to be her dependent. Helen would use her itemized deductions of $12,400 because they are more than her standard deduction of $12,200

b. The applicable standard deduction as per IRS Tax Rules 2019 for Amanda and Adam is $27,000 :

i. regular standard deduction= $ 24,400

ii. additional deduction for blindness = $1,300

iii. additional deduction for being over age 65 = $1,300 .

They will be deducting the standard deduction because it is greater than their itemized deductions of $25,800.

c. Since Micah has left Ilana, she cannot file as married-filing jointly. For that, Micah must sign the return as well.As per the tax law, she is not allowed to file as head of household since she qualifies to file the return as an abandoned spouse.

The maximum allowable deduction for her would be $ 18,350 i.e. her standard deduction. She will use her standard deductions of $18.350 because it exceeds her itemized deductions of $ 14,000.

d. As per the tax law, Constantino needs to file as single because his daughter would not fall under dependent category (as fails gross income test). Constantino will be using his itemized deductions of $12,800 since it exceeds his standard deduction of $12,200.

e. For 2019, Helen would be considered as the head of household. As per the tax law, a taxpayer would be qualified as a surviving spouse if the dependent would be her child, stepchild, foster child or adopted child. Since the dependent child is her grandson, she would not qualify as a surviving spouse. But she would qualify as head of household and her standard deduction is as follows:

i. regular standard deduction= $ 18,350

ii. additional deduction for being over age 65 = $1,650

Total Standard deduction = $ 18,350 + $ 1,650= $ 20,000

She will deduct her standard deduction of $20,000 because it is greater than her itemized deductions of $14,000

f. For 2019, Helen would be considered as married since Sam dies in 2019.

Her standard deduction is calculated as follows:

i. regular standard deduction = $24,400

ii. additional deduction for both being over age 65 = $2,600 .

Total Standard deduction = $ 24,400 + $ 2,600= $ 27,000

She will be deducting her standard deduction because it is more than the itemized deductions of $14,000.