Cindy (age 40) and Don (age 39) Cowen are married. Don's 17 year old son from a former marriage lives with them. They also fully support Cindy's mother, Ella who lives with them. Ella's only income during 2013 was interest of 2,500. Cindy works as a retail manager and Don is a self-employed electrician. Their 2013 tax and other information are as follows:
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Salary - Cindy
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50,000
|
|
Federal withholding on salary
|
18,000
|
|
State withholding on salary
|
2,000
|
|
Interest income on bonds:
|
|
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Issued by Webster Bank
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3,000
|
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State of Connecticut
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2,000
|
|
Savings account interest
|
700
|
|
Dividends from RGR, Inc. (all are non-qualified)
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5,000
|
|
Value of employer provided medical insurance
|
3,000
|
|
Value of premiums for $50,000 of group term life insurance
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500
|
|
Cindy's mother's medical expenses paid by Cindy
|
9,500
|
|
Inheritance from Cindy's father's estate
|
7,500
|
|
Personal loan obtained to pay credit card debt
|
20,000
|
|
Interest paid on personal loan
|
1,000
|
|
Child support received from Don's ex-wife
|
8,000
|
|
Alimony paid to Don's ex-wife
|
3,400
|
|
Donations to church
Real Estate taxes on primary residence
|
1,500
4,500
|
|
Mortgage interest on primary residence (<$1M)
|
3,000
|
|
Don's business revenues
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40,000
|
|
Don's business expenses
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16,750
|
|
|
|
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Required: Determine the following for the Cowen's 2013 tax year:
- Exclusions (if any) $ ___________
- Gross income (excluding Don's SE income) $ ___________
- Don's net self-employment income $ ___________
- Adjusted gross income $ ___________
- Itemized deduction or standard deduction amount $ ___________
- Deduction for exemptions $ ___________
- Taxable income $ ___________
- Income tax liability $ ___________
- Self-employment tax liability $ ___________
- Net tax due/(refund) $ ___________