Tax assignment

ASSIGNMENT 3

ACCT 422

TAX AND ZAKAT ACCOUNTING

(4 QUESTIONS 2.5 MARKS EACH)

Q1.Explain the economic, accounting and tax concept of Income in detail.

Q2: John and Georgia are a married couple with two dependent sons. Their salaries total $130,000. They have a capital loss of $8000 and tax-exempt interest income of $1000. They paid home mortgage interest of $10000, state income taxes of $4000 and medical expenses of $3000 and they made charitable contributions of $5000.

A) Compute their AGI (1 point)

B) Compute their total itemized deductions. (1 point)

C) What is the amount of their personal exemptions? (1 point)

D) Compute their taxable income (Tax year is 2013) (1 point)

Q3. In 2013 X and Y have salaries of $35,000 and $27,000, respectively. Their itemized deductions total $8,000. They are married, under 65, and live in a common law state.

a. Compute their taxable income assuming that they file a joint return.

b. Compute their taxable income assuming that they file separate returns and that Y claims all of the itemized deductions.

Q4. List Items that Are Not Income.