[SOLVED] Federal Income Tax

Peter and Maria Williams live in Miami, Florida, and have hired your Group to prepare their income tax for the taxable year 2019. Read carefully the following personal and financial information supplied by the William’s family and prepare an Excel spread sheet to answer the questions and requirements shown at the end on page four. (See Attachment)    Personal information is as follows:   Peter Taxpayer               Married               Filing Jointly             DOB 6/30/1961                            Maria  Wife               Does not work             Full time Student             DOB 12/31/1966                          John Son               Full time Student             DOB 6/15/2002             Lived with the taxpayer from 06/05/2019 to 12/31/2019 Peter pays more than 50% of his support expenses                         Paula     Friend               No full time Student             DOB 1/20/1995             Lived with the taxpayer from 01/01/2019 to 12/31/2019                    Carlos Peter’s Father             DOB 6/1/1933             Retired               Carlos lives in Denver, CO.           Peter contributes with 55% of his Father’s support                        Peter is currently working with “ABC” corporation         Peter lost his former job and got unemployment payments      Peter paid alimony to his ex-wife                           All in Peter’s family are USA citizens            Peter has a small business he personally runs in his free time Financial information is as follows:           W-2 From his employer     Wages, tips, other compensation   105,000 Federal income tax withheld   17,850 Social security tax withheld (complete this information)   ? Medicare tax withheld (complete this information)   ?       1099-M received from his customers     Accounting Consultant fees received   45,000     Self-Employee Business Activity Reported     Sales   675,000 COGS   268,000 Expense – W-2 Wages paid to their employees   81,800 Expense – Office supplies for business   32,400 Expense – Office Rent paid for business   60,300 Business Property and Equipment   650,000     Other Income and/or Expenses     Unemployment Received   1,600 Alimony Paid   1,250                 Medical Expenses   47,000 Health insurance premiums shown on Peter’s W-2       for Peter, Maria, John, Paula & Tim ($5000 each person) 20,000   Peter’s father’s Dental Treatment 12,500   Prescribed glasses for Maria’s father who lives in NY 650   Medical co-pays for Peter’s wife 350   Peter’s Lab Exams that were not covered by his health insurance 500   Peter’s esthetic plastic surgery to repair a nose problem due to an accident 6,000   Insurance reimbursed 60% of the nose Plastic surgery ?   Maria’s plastic surgery to remove fat excess from her belly 7,000               Mortgage payments and Tax for a Home bought on 06/01/2018 for $745,000   25,600    Principal Paid 10,000      Interest Paid 12,000      Home property State tax Paid 3,600           Mortgage payments and Tax for a Home bought on 06/01/2018 for $745,000   25,600    Principal Paid 10,000      Interest Paid 12,000      Home property State tax Paid 3,600     Other Personal Expenses   23,090 Utilities paid (Home) 4,000   Groceries 5,000   Cable, cell, and internet 1,440   Condominium Association’s Due 2,000   Gas and personal vehicle maintenance 1,600   Home improvements 2,600   A/C and Home Repairs 5,000   Credit card interest (personal) 750   Sales Tax paid 700     Loan Payments for Maria’s Education   8,300    Principal 6,500      Interest 1,800     Donations   28,000    Land donated to” XYZ” Church  25,000      Cash Donated to a needed family who attends your church 3,000         Hurricane Casualty loss – Florida is Federally declared a Disaster Area        Appraisers determined that 60% o the home was destroyed        Appraisers used the Home appraised tax value to determine the loss 575,000      Insurance reimbursed 87.5% of the loss ?         Taxpayer pays for his vehicle   2,600    Principal 1,500      Interest 1,100         Rental of vacation Home – information          It was used 30 days for family’s vacations.          The Williams’ live in the city the rest of the year          Vacation home rented for 150 days 15,000        They paid real estate taxes on the vacation home 2,400         Utilities were paid at $150/month 900         Mortgage interest paid to Citibank 4,800         Six months Depreciation 1,200         You Are Required to: The Williams require you to determine the following as of December 31, 2019:   Determine Social Security and Medicare that should appear in the W-2 form Self-Employment tax. If any, apply the Social Security Tax only to the maximum amount required Adjusted Gross Income Taxable Income after Total number of dependents Amount and detailed calculations of the Standard or Itemized deduction as the case may be Determine any carryover and/or carryforward that applies for any concept Determine the Qualified Business Income Deduction if applicable Determine their Payable or Refundable Tax, disregarding all possible credits the Williams might be entitled to.

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