Assignment task:
Please use current tax rates, exemptions, and laws. Be sure to show ALL of your work so that I can give you partial credit. Use 2023 tax law.
Use these instructions: 2023 Instruction 1040 (irs.gov).
Sam is single, 30, and has no children. He made a salary of $250,000 with $40,000 in Federal withholding. He has the following items:
Medical 8,000
Mortgage interest 5,000
Credit card interest 2,000
Property tax 2,500
Sales tax 1,500
State income tax withheld 22,000
Charitable contributions 1,000
Tax return preparation fee 500
Please show your work.
- Compute the adjusted gross income.
- Compute the itemized deductions before any limitations.
- Compute the itemized deductions after any limitations.
- Compute the taxable income.
- Compute the tax liability.
- Is he subject to alternative minimum tax? Why or why not?
- Compute his tax refund or tax due.