Bob (age 40) and Susan (age 39) Cowen are married. Susan works as a retail manag
ID: 2453611 • Letter: B
Question
Bob (age 40) and Susan (age 39) Cowen are married. Susan works as a retail manager and Rob is a self-employed electrician but does not maintain a home office. Their 2015 tax and other information are as follows:
Salary – Susan
75,000
Federal withholding on salary
24,000
State withholding on salary
4,000
Interest income on municipal bonds:
State of Connecticut
2,000
Savings account interest
900
Dividends from RGR, Inc. (all are non-qualified)
4,000
Value of employer provided medical insurance
2,000
Inheritance from Susan’s father’s estate
7,000
Interest paid on personal car loan
800
Interest paid on personal loan
1,000
Child support paid to Bobb’s ex-wife
10,000
Alimony paid to Bob’s ex-wife
3,000
Qualified Out of Pocket Medical Expenses
4,000
Donations to church
Real Estate taxes on primary residence
2,500
6,000
Mortgage interest on primary residence (<$1M)
4,000
Bob’s business revenues
50,000
Bob’s business expenses
17,000
Required: Using the tax formula format, determine the following for the Cowen’s 2015 tax year (show all calculations):
Salary – Susan
75,000
Federal withholding on salary
24,000
State withholding on salary
4,000
Interest income on municipal bonds:
State of Connecticut
2,000
Savings account interest
900
Dividends from RGR, Inc. (all are non-qualified)
4,000
Value of employer provided medical insurance
2,000
Inheritance from Susan’s father’s estate
7,000
Interest paid on personal car loan
800
Interest paid on personal loan
1,000
Child support paid to Bobb’s ex-wife
10,000
Alimony paid to Bob’s ex-wife
3,000
Qualified Out of Pocket Medical Expenses
4,000
Donations to church
Real Estate taxes on primary residence
2,500
6,000
Mortgage interest on primary residence (<$1M)
4,000
Bob’s business revenues
50,000
Bob’s business expenses
17,000
Explanation / Answer
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