Question

Please compute Gross Income and Adjusted gross income based on the following information

Salary		$187,750.00
Interest income		$230.00
Municiple Bond interest		$450.00
Treasure bond Interest		$675.00
Dividends		$1,885.00
Short-Term Capital Gain (SBUX STOCK)		$0.00
Short-Term Capital Gain (AMZN STOCK)		-$4,350.00
Short-Term Capital Gain (UA Stock)		$26.45
Long-term Capital Gain (AAPL STOCK)		$3,000.00
Daycare cost for child #1		$10,000.00
Dentist fees (unreimbursed by insurance)		$10,500.00
Prescription cost(reimbursed by insurance)		$1,380.00
Mortgage Interest		$13,478.00
Property Taxes Paid		$4,144.00
Vehicle registration fee		$1,250.00
Fee faid to CPA		$2,000.00
Gym Membership		$600.00
401K contributions		$23,980.00
Employer match		$17,985.00
Healthcare savings account contribution		$2,600.00
Red Cross Donation		$1,000.00
Food bank Donation		$2,500.00
Church donation		$3,750.00
Goodwill donation		$450.00

Answer 1

Computation of Gross Income and Adjusted Gross Income	$	$
From Form W2 -
Gross Salary	187750	187750
Schedule B -
Interest Income	230
Municipal Bond Interest (exempt)	0
Treasury bond Interest	675
Dividends	1885
Income from schedule B		2790
Schedule D -
Short Term Capital Gain (AMZN Stock)	-4350
Short Term Capital Gain (UA Stock)	26.45
	-4323.55
Long Term Capital Gain	3000
Net Long Term Capital gain		-1323.55
Gross Income		189216.45
less Adjustments to Income (Above the line Deductions)
401 K Contributions - Self + Employer's Match - (Upto 57000)	41965
Health Care Saving account contriibutions	2600	-44565
Adjusted Gross Income		144651.45

Notes -

a. Day Care Costs of child can be claimed as tax credit after computation of gross liability if all the conditions are met.

b. WEF TCJA 2018, Tax prepeartion fees can no longer be deductible unless that individual is self-employed.

c. Prescription Costs (which are reimuresed by the Insurance Company) cannot be dedcuted by the Individual.

d. Gym memebership fees, in general, are not deductible from IRS point of view unless if it is a part of medical treatment prescribed by a doctor (in which case it cab be itemized)

e. All other expenses can be claimed as Itmeized Deductions in Schedule A after computation of Adjusted Gross Income and provided all the conditions attached for the deduction are met.

f. 401(k) contributions which are deductible are assumed to be Traditional IRAs with contribution limit (combined) is 57000$