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).
Married Couple and 2 children ages:16 and 17
Husband earns $75,000 (and withholds tax of $10,000)
Wife earns teaching $45,000 (and withholds tax of $6,000)
In the summer, the wife runs a summer camp program and has the following items:
Income $12,000
Expenses:
Marketing 1,500
Contract labor 4,500
Equipment 14,000 (bought in May and used 100% in business)
Interest Income CDS 3,000
Mortgage Interest 10,000
Property Taxes 5,000
Medical 14,000
Business expense 2,000 (Non-Reimbursed husband job)
They will file married filing jointly. Take only MACRS depreciation on the equipment. Do not elect to expense under 179 or special deduction. Please show your work.
- Compute their business income.
- Compute their adjusted gross income.
- Compute their itemized deductions.
- Compute their taxable income.
- Compute their tax liability.