Problem: Please complete the comprehensive problem providing detailed computations with labels.
Mike and Laura Weiss are married and file a joint return. Mike is a self-employed orthodontist, and Laura is a college professor. Mike and Laura have three children. The oldest is Matt, 23, who lives at home and is a Medical student at the University of Cincinnati. He worked part-time this year and earned $2,500 that he used to pay his own support. Matt and Laura provided $9,500 toward Matt's support not including $12,000 they paid for medical school tuition. They also provided over half the support of their daughter Diane, who is a full-time student at Kenyon College. Diane worked part- time as a waitress this year, earning $4,500 but received $20,000 for tuition from her parents during 2015. Diane lived at home until she was married in December 2015 and then moved in with her husband, Patrick. She filed a joint return with Patrick who made $25,000 during the year. Alice is the youngest and lived in the Weiss' home for the entire year. She is 14 and attends the local middle school. She made $900 this year in babysitting revenue.
Laura is a math professor at Xavier University in Cincinnati, where she earned $35,000. The university withheld federal income tax of $3,575, state income tax of $850, Cincinnati city income tax of $350, $1,920 of social security and $485 of medicare tax. She also worked part-time for the Cincinnati Bengals. The NFL franchise paid her $12,000 in salary and withheld $1,205 of federal income tax, $350 of state income tax, $155 of Cincinnati city income tax, $590 for social security and $145 for medicare tax.
Laura is required by the university to visit several high schools in the area to evaluate students who are completing their student teaching. However, she is not reimbursed for the expenses she incurs in doing this. During the spring and fall semesters of 2015 she drove her personal automobile 6,350 miles in fulfilling this obligation. She has always used the standard mileage method for computing this deduction.
The Weiss's received $1100 of interest from State Savings Bank on a joint account. They also received interest of $1,050 on City of Cincinnati School District Bonds. They own stock in Charter Corporation and Delhi Company which they received a total of $1,405 in qualified dividends during the year. Mike felt the market was going to crash during 2015 so he decided to liquidate some stocks and invest the money in his business. They sold the following stock in the beginning of the year:
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Company
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Date Purch.
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Date Sold
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Sales Price
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Original Cost
|
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Rose Company
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500 shares
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8/10/2001
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1/2/2015
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$29,000
|
$37,000
|
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Big Sky Industries
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200 shares
|
9/12/2015
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12/2/2015
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$12,000
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$15,000
|
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Blue Hat Inc.
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150 shares
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9/23/2000
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1/2/2015
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$13,000
|
$5,500
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Laura also sold a painting from her grandmother. Her grandmother died this year and Laura did not want to keep the painting. The painting was received as a gift in 2013 and was valued at $15,000 at the time. Her grandmother bought the painting from a friend for $2,000. Laura sold the painting for $20,000 this year and used it to help pay for education expenses.
Mike practices under the name of Mike P. Weiss Orthodontics. During the year he had $345,000 of gross receipts and the following expenses during the year:
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Advertising
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$1,200
|
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Professional Journals and Dues
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$490
|
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Contributions to employee benefit plans
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$2,000
|
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Malpractice Insurance
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$3,200
|
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Fine for overbilling State of Ohio
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$5,000
|
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Insurance on office contents
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$720
|
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Accounting Services
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$2,100
|
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Office Expenses
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$4,388
|
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Office Rent
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$12,000
|
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Dental Supplies
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$17,672
|
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Utilities and Telephone
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$3,360
|
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Wages for employees
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$60,000
|
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Payroll Taxes
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$2,400
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Mike withdrew $100,000 from the business for personal expenses. In June, Mike decided to refurbish his office with the proceeds from the stock sales. The project was completed on July 1. Mike's expenditures included $18,000 for new office furniture, $10,000 for new equipment and $6,000 for two new office computers.
The Weiss' owned a rental property which was purchased in 2005 for $155,000. From January 1 of 2006 the Weiss' were lucky enough to have the same tenant because it made it easy to manage the property. They received $800 in monthly rent for the year. They had the following expenses during the year:
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Property Insurance
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$500
|
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Property Taxes
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$800
|
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Maintenance
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$465
|
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Utilities
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$275
|
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Depreciation
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$4,870
|
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Landscaping
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$300
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Mike and Laura have the following receipts for expenses during 2015:
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Prescription medicine and drugs
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$376
|
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Doctor Bills
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$2,468
|
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Penalty for underpayment of prior year Federal tax
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$15
|
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Real estate taxes on personal residence
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$4,762
|
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Interest on Home Mortgage
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$8,250
|
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Interest on Car Loan (Laura)
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$595
|
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Cash Contributions to Synagogue
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$6,080
|
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Payroll deduction for Contribution to United Way
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$150
|
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Professional Dues and Journals (Laura)
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$325
|
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Fee for preparation of tax returns
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$500
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The Weiss's filed their 2014 federal, state and local returns on April 1, 2015. They paid the following additional taxes with their returns: Federal income taxes $6355, State Income Taxes $285 and city income taxes of $105. They also paid estimated taxes during 2015 in the amount of $46,000 in Federal Taxes, $1,200 in State Taxes and $600 in city taxes. All estimated taxes were paid by December 31.
What is the amount owed/refunded by the Weiss's for 2015?