Chapter 1 Group 1 & 2 Problems for Income Tax Fundamentals

Federal Taxation

Chapter 1

Due Sept 5, 2012

Wendy Albert

Group 1

1. D

2. D

3. A

4. C

5. B.

6. C

7. C

8. E

9. C

10. C

11. B

12. B

13. B

14. E

15. A

16. E

17. C

18. D

Group 2

1. A. Furthering economic goals like reducing unemployment

B. Furthering social goals like encouraging contributions to charities.

C. Raising revenue to operate the government

2. A. AGI = 36,500

B. Standard Deduction 11,600

C. Taxable income= 17,500

3. A. AGI= 23,000

B. Standard Deduction= 5,800

C. 13,500

4. A. AGI= 46,900

B. 5,800

C. 3,700

D. 37,400

5. Gross income –deductions for AGI= AGI- greater of itemized deductions or the standard deduction-exemptions = taxable income.

6A. AGI= 48,079

B. Standard deduction = 11,600

C. taxable income= 29,079

D. tax liability before making work pay credit 3,511

7. AGI= 17,400

Stand. Ded. 5,800

Exemp. 3,700

Taxable income 11,450

Tax liability 1,296

8. Gross income= 14,400

Deduct. For AGI= 0

AGI 14,400

SD 5,800

Exemp 3,700

Taxable income 4,900

9. A. AGI= 45,000

SD 5,800

Exemp 3,700

Taxable income 35,500

B. Tax table because taxable income is less than 100,000.

C. $5006

10. A. Gross income= 68,000

B. AGI= 64,800

C. itemized

D. 5

E. taxable income= 34,300

F. 4,299

11. A. AGI= 87,000

B. 7,400

C. 67,600

12. Gross income= 40,000

Deductions= 0

AGI= 40,000

SD= 5,800

Exemp= 3,700

Taxable income 30,500

Tax liability 4,154

13. Yes. Social Security taxes are due.

14. Allen 2,735

Boyd 3,260

Caldwell 4,529...