Question 1: Maria and Tony are married. Assume their taxable income in 2023 after all deductions is $90,000, including $5,000 of qualified dividends. What is their income tax liability in 2023? (Use the tax rate schedules, long-term capital gains tax brackets.)
Question 2: Alvin is a self-employed sound technician who reports on the cash method and calendar year. Alvin has a shop in Austin, Texas, but he spends much of his time away from his shop traveling to and from various concerts around the country. Alvin leases a truck to move his equipment around the country, and this year, he spent $12,000 in lease payments and paid $18,000 for gas, oil, and repairs. Alvin keeps records of his personal use of the truck and he estimates that 6,000 of the total 36,000 miles put on the truck this year were for personal trips. What amount of these expenses may Alvin deduct as business expenses?
Question 3 Jenna (age 50) files single and reports AGI of $40,000. This year she has incurred the following medical expenses:
Dentist charges $ 90
Physicians' fees 2,800
Cosmetic surgery 400
Cost of eyeglasses 250
Hospital charges 1,330
Prescription drugs 240
Over-the-counter drugs 75
Medical insurance premiums (not through an exchange) 1,200
Calculate the amount of medical expenses that will be included with Jenna's other itemized deductions.
Question 4: Roy, a resident of Michigan, owns 25 percent of a fourplex in the nearby college town of Ann Arbor with three other friends. The fourplex is rented to students who attend the University of Michigan. Roy's responsibility is to approve new tenants each year and take care of any maintenance issues. During the year, the rental property generated a $81,000 loss, which was split equally among Roy and his three friends. Assuming Roy's only source of income was $122,900 of salary, how much of the rental loss can Roy deduct this year, and what amount must be carried forward?