Tax Memo Project
Robert and Jean, a married couple intend to file a join tax return for the tax year 2016. They had also filed a join return in 2015. They will have AGI of $ 30,000. Their expenses for 2016 are as
|
Prescription drugs
|
$ 300*
|
|
Medical insurance premiums
|
900
|
|
Doctor and dental bills paid
|
1,400*
|
|
Eyeglasses for Robert
|
155
|
|
Hospital and clinic bills paid
|
450*
|
|
Property taxes paid on home
|
900
|
|
State income taxes paid:
|
|
|
Remaining 2015 tax liability
|
125
|
|
Withheld from wages during year
|
1,850
|
|
State and local sales taxes paid:
|
|
|
Amount paid on new automobile
|
800
|
|
Amount paid on new wide screen television
|
280
|
|
Personal property taxes paid
|
100
|
|
Interest on home mortgage**
|
4,750
|
|
Interest paid on personal auto loan
|
1,100
|
|
Interest paid on credit card purchases
|
400
|
|
Interest paid on E.F. Hutton margin account***
|
120
|
|
Cash contributions to church
|
2,000
|
|
Fair market value of Hightech Corp. stock contributed to church (purchased for $1,000 three years ago)
|
5,000
|
|
Labor union dues paid by Robert
|
200
|
|
Qualifying education costs paid by Jean
|
300
|
|
Safe deposit box rental (for stocks and bonds)
|
50
|
|
Fee paid accountant for preparation of 2016 state and
|
|
|
Federal tax returns
|
350
|
* These amounts are net of insurance reimbursements received during 2016.
** This mortgage was created at the time the home was purchased.
*** This investment interest expense is related to the production of $1,500 of net investment income.
The Snyders drove their personal automobile 500 miles for medical and dental treatment and an additional 1,000 miles in connection with charitable services performed for their church. Assuming Robert and Jean are both under age 40, lived in Virginia for the entire year, and plan to file a joint income tax return, determine their total itemized deductions.