I need help with the following questions I got incorrect. Exercise 3-18 (Algorit
ID: 2336818 • Letter: I
Question
I need help with the following questions I got incorrect.
Exercise 3-18 (Algorithmic) (LO. 2) Compute the standard deduction for the following taxpayers. If an amount is zero, enter "O". Click here to access the standard deduction table to use. Margie is 15 and claimed as a dependent by her parents. She reports $1,375 in dividends income and $2,400 in wages from a part-time job. Ruby and Woody are married and file a joint tax return. Ruby is age 66, and Woody is 69. Their taxable retirement income is $14,965. 2,750 a. b. 25,300X c. Shonda is age 68 and single. She is claimed by her daughter as a dependent. Her 3,070 X earned income is $330, and her interest income is $470. d. Frazier, age 58, is married but is filing a separate return. His wife Emma itemizes her deductions.Explanation / Answer
3-18,
For the year 2018,
a. $2750
When filing her own tax return, Margie is limited to the greater of $1,050 or $2,400 (the sum of the earned income for the year plus $350.)
b. $26,600
A taxpayer who is age 65 or over or blind in 2018 qualifies for an additional standard deduction of $1,300 or $1,600, depending on filing status. Ruby and Woody's standard deduction is the amount for MFJ $24,000 plus the additional $1,300 for Ruby being age 65 or older and another $1,300 for Woody's being age 65 or older.
c. $2,650
When filing her own tax return, Shonda is limited to the greater of $1,050 or $680 (the sum of the earned income for the year plus $350). This limitation applies only to the "basic" standard deduction. A dependent who is 65 or older or blind and single is also allowed the additional standard deduction amount on his or her own return 0f $1,600. Therefore, Shonda's standard deduction is $2,650 ($1,050 + $1,600).
d. $0
Frazier is ineligible to use the standard deduction and therefore must itemize because he is married filing a separate return when his spouse itemizes deductions.
3-27 (c)
For 2018, the standard deduction amount for an individual who may be claimed as a dependent by another taxpayer cannot exceed the greater of $1,050 or the sum of $350 and the individual’s earned income. For the year you are filing, earned income includes all income from employment, but only if it is includable in gross income. Examples of earned income are: wages; salaries; tips; and other taxable employee compensation. Earned income also includes net earnings from self-employment. Earned income does not include amounts such as pensions and annuities, welfare benefits, unemployment compensation, worker's compensation benefits, or social security benefits, alimony, capital gains, interest income, stock dividends and bond interest, and passive income generated from rental property.
A dependent who is 65 or older or blind and single is also allowed the additional standard deduction amount on his or her own return of $1,600. For those who are married is $1,300.
a. $13,050 (1900 + 10800 + 350)
b. $7,150 (5100 + 1700 + 350)
c. $1,050 (1050 or 500 + 350)
d. $1,050 (1050 or 350)
e. $7,150 (1050 or 5200+1600+350) (assume she is single)
If married $6,850 (1050 or 5200+1300+350)