Question

Comprehensive Problem (Tax Return Problem). Rodney and Alice Jones have three small children, ranging in age from 5 to 10. One child is blind and needs special care. Rodney works as an accountant for a large CPA firm and has gross income of $45,000. Alice is a lawyer with a national law firm and earns $48,000. Rodney’s parents are quite old, and he and his wife fully support them.

Rodney’s employer provides group-term life insurance at twice the employee’s annual salary. Rodney is 40 years of age.

During 2018, Rodney and Alice receive the following dividends on their jointly held investments:

Dividends from Mexico Inc. (Mexican Corp.) $700

Dividends from Widget Steel Corp. $150

They received interest income from the following investments: Interest on State of Ohio highway bonds $800

Interest on deposits in savings and loans $400

The Joneses have itemized deductions of $25,000. Compute their taxable income. * NOTE: THIS IS FOR 2018*

Answer 1

ANSWER:

Here we have 2 persons namely "Rodney" and "Alice Jones",

We have to determine the Taxable income of above 2 persons

so by using given data we construct a spread sheet to evaluate Taxable income,

1.Taxable income of Rodney:

Description		Income($)
Salary		45,000
Dividends from Mesxico Inc(mexcian corp.) /2	700/2	350
Dividends from Widget streetcorp /2	150/2	75
Interest on deposites in savings and loans /2	400/2	200
Interest in the state of ohio highway bonds /2	800/2	400
Gross total income	45,00+350+75+400+200	46,025
Deductions	-	0
Taxable income	Gross totalincome- deductions=46,025-0	46,025

2.Taxable income for Alice Jones:

Description	Explanation	Income($)
Salary		48,000
Dividends from Mexico IncMexican corp)/2	700/2	350
Dividends from Widget street corp /2	150/2	75
Intrest in the state of ohio highway bonds/2	800/2	400
Interest on dposite in savings and loans/2	400/2	200
Gross total income	48,000+350+75+400+200	49,025
Deductions		15,000
Taxable income	Gross total income-deductions=49,025-15,000	34,025