Need help in Taxes (Accounting)

nzlwbua1
timer Asked: Dec 8th, 2014

Question Description

Type of Documentation  James & Pamela Brock  William Brock

Employer paid medical Insurance Premiums $10,000  $1,200

Medical insurance premiums paid by taxpayer$4,000   $8,000

Medical expenses related to eye surgery not covered by insurance17,500  N/A

Reimbursements from medical insurance carrier$5,200  N/A

Prescription drug costs$1,800   $2,200

State income taxes withheld by employer$6,750  $450

State income tax paid when filing tax return  $2,300   N/A

Real estate taxes on residence$12,000  N/A

Real estate taxes on Westchester Woods property$5,000  N/A

Property tax on automobile$950  $375

Property tax on Westchester Wood's delivery truck$375  N/A

Sewer use charge$295   N/A

Home mortgage interest$14,400  N/A

Home equity interest (the loan amount is $75,000 and the difference between the FMV of the home and acquisition indebtedness is $55,000)$3,000  N/A

Cash gifts (properly supported)$1,800   $1,500

Contribution:Artwork, purchased for $8,000 and held for five years, donated to a qualified charity (the charity will display the artwork). The FMV of the artwork is $27,500  N/A

ContributionN/A   Donated land to a qualified charity. The land was held for 22 years. The basis of the land is $4,200 and its FMV is $67,800

Contribution carryover from a prior year$0  $14,000

Unreimbursed travel expenses (job related)$700  $180

Safe deposit box$55   N/A

Tax preparation (60% allocated to Westchester Wood)$1000  $125

Required:Calculate the itemized deductions and Prepare Form 1040 Schedule A for:James and Pamela Brock andWilliam Brock.Show the calculations you made to determine the deductible itemized deductions for medical, interest, taxes, contributions and miscellaneous deductions. Indicate the amount of any contribution carry forward. Use the AGI for James and Pamela Brock and William Brock that was calculated in Week 5.www.IRS.gov and locate the current year's Form 1040 Schedule A.

prok.xlsx 

Unformatted Attachment Preview

Course Project Solutions James & Pamela Brock Employer paid medical premiums Medical insurance premiums paid by taxpayer Medical expenses related to eye surgery not covered by insurance Reimbursements from medical insurance carrier Prescription drug costs State income taxes withheld by employer State income tax paid when filing tax return Real estate taxes on residence Real estate taxes on Westchester Wood's property Property tax on automobile Property tax on Westchester Wood's delivery truck Sewer use charge Home mortgage interest Home equity interest Cash gifts - properly supported Contribution - artwork Contribution - land Contribution carryover from a prior year Unreimbursed travel expenses Safe deposit box Tax preparation William Brock 10,000 4,000 17,500 5,200 1,800 6,750 2,300 12,000 5,000 950 375 295 14,400 2,200 1,800 27,500 700 55 400 1,200 8,000 2,200 450 375 1,500 67,800 14,000 180 125 - - Things to remember: 1. Use 2013 forms, tax rates and % of AGI nondeductible amounts. I will deduct points for incorrect forms, etc. 2. William is over 65 this may affect one of your % of AGI rates. 3. Shade items that will not be deductible in red 4. You will have to calculate the amount of home equity interest that will be allowed as a deduction. 5. You will have to calculate the amount of tax preparation fees that are deductible as a personal deduction 6. You will have to determine the deductible part of William's contribution of land. William has a $14,000 contribution carryover from the prior year 7. The top of the spreadsheet contains all the entries from the project instructions. If you scroll down, you will see areas to show your calculations. 8. Read each item carefully. Some of the items on this list may be for the business or nondeductible. 9. Use your text and the IRS website as resources. 10. Use AGI amounts from Module 5. I provided you with the correct amounts when I returned your work. 11. If you do not like this spreadsheet, you can design your own, but it has to show all of your work. 12. For the final course project, you will have to redo the Schedule A forms because James and Pamela's AGI will change and they all may have more itemized deductions. This part of the project will give you a good start to completing the final Schedule A forms. Red shaded amounts cannot be used as itemized deduction. Medical deduction: Less 10% of AGI if under 65, 7.5% if over 65 AGI James & Pamela: $ AGI William: $ Deductible Medical Expenses Interest deduction: Formula for this line: - AGI x applicable % of AGI: Example: -40000*10% Formula for this line: - AGI x applicable % of AGI: Example: -40000*10% - - Deductible Interest Expenses - Deduction for Taxes: Deduction for Taxes - - - - - - - - Contribution Deduction: Contribution Deduction Contribution Carryforward: Miscellaneous Itemized Deductions: Less 2% of AGI AGI James & Pamela: $ AGI William: $ Miscellaneous Itemized Deduction Formula for this line: - AGI x applicable % of AGI: Example: -3000*2% Formula for this line: - AGI x applicable % of AGI: Example: -3000*2% - -
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