Question

Please Compute Gross Income, Adjusted Gross income, and Taxable income based on the following information below.

Salary		$299,750.00
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 from employer		$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

Tax Liability -

Note 1) Municipal bond interest (may also be exempt from state tax if issued in your state of residence).

2) The interest paid by U.S. Treasury bonds is exempt from income taxation at the state and local level,

3) Eligible child care expenses are limited to $3,000 per dependent.Hence Rest 7000 is disallowed.

4) For your 2019 return, you can only deduct the amount of the total un-reimbursed allowable medical care expenses for the 2019 Tax Year that exceed 7.5% of your adjusted gross income.

5) Taxpayers can deduct the interest paid on first and second mortgages up to $1,000,000 in mortgage debt (the limit is $500,000 if married and filing separately). Any interest paid on first or second mortgages over this amount is not tax deductible.

6) Fee paid to CPA is not allowable Expense.

7) Contributions to a traditional 401(k) reduce your taxable income. Contributions to qualified retirement plans such as traditional 401(k)s are made on a pretax basis, which removes them from your taxable income and thus reduces the taxes you'll pay for the year

8) Employer matching contributions do not count toward your maximum contribution limit as set by the Internal Revenue Service (IRS). Nevertheless, the IRS does place a limit on the total contribution to a 401(k) from both the employer and the employee.Hence this is not part of Income

9) An HSA allows you to make annual tax-deductible contributions up to $3,550 for individual plans

10) You may deduct fair market value of Food Doantion , we are assuming that given value is Fair.

11 )If you itemize deductions on your federal tax return, you may be entitled to claim a charitable deduction for your Goodwill donations