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***** Exploring Itemized Deductions Wages: Michael ($75,000), Emily ($58,000) ...

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Accounting

*****
Exploring Itemized Deductions
Wages: Michael ($75,000), Emily ($58,000)
Interest Income: $1,200
Dividend Income: $900
Long-term capital gains: $2,800
QBI (sole proprietorship): Michael ($45,000)
Itemized Deductions:
Medical Expenses: $5,200
State and Local Taxes: $9,500
Charitable Contributions: $4,000
Allowable deduction for self-employment tax: $3,200
Calculate: AGI, Taxable Income, Potential Child Tax
Standard Deduction vs. Itemized
Wages: John ($54,000), Sarah ($48,000)
Interest Income: $2,300
Dividend Income: $550(qualified dividends)
Long-term capital gains: None
QBI (sole proprietorship): None
Itemized Deductions:
Medical Expenses: $3,000
State and Local Taxes: $8,300
Charitable Contributions: $2,100
Allowable deduction for self-employment tax: None
Calculate:
AGI, Taxable Income, Potential Child Tax Credits, Total Tax Liability (Before any other credits) using ITEMIZED deductions.
Repeat the calculations using the STANDARD deduction and compare the results.

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