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TAx problems




Question;QMartin S. Albert (SS # 363-22-1141) is 39 Years old and is married to Michele R. Albert (SS# 259-05-8242). The Alberts live at 512 Ferry Road, Newport News, VA 23100. They file a joint return and have two dependent children (Charlene, age 17, and Jordan, age 18) Charlene's SS3# is 260-12-1234, and Jordan's is 263-23-4321. In 2007, Martin and Michele had the following transactions:a) Martin received $115,000 in salary from Red Steel Corporation, where he is a construction engineer. Whitholding for Federal income tax was $10,750. The amounts witheld for FICA tax were as follows: $6,622 (106,800 x 6.2%) for Social Security and $ 1,668 (115,000x 1.45%) for Medicare. Martin worked in Mexico from January 1, 2006 until Feb. 15 2007. His $108,000 salary for 2007 includes $16,000 he earned for January and one-half of February 2007 while working in Mexico.b) Martin and Michele received $800 in dividends on Green, Inc. stock and $400 interst on Montgomery County (Virginia) school bonds.c) Martin recieved $2300 interest from a Bahamian bank account.d) Michele received 50 shares of Applegate Corporation common stock as a stock dividend. The shares had a fair market value of $2000 at the time Michele received them, and she did not have teh option of receiving cash.e) Martin and Michele received a $900 refund on their 2006 Virginia income taxes. Their itemized deductions in 2006 totaled $12,500f) Martin paid $6,000 alimony to his former wife, Rose T. Morgan (ss # 262-55-4813)g) Marin and Michele kept the receipts for their sales taxes paid of $1,100h) Martin and Michele's itemized deductions were as follows:-State income tax paid and withheld totaled $5,100-Real estate taxes on their principle residence were $3,400-Mortgage interest on their principle residence was $2,500-Cash Contributions to the church totaled $2,800Part 1- TaxComputationCompute the Albert's net tax payable (or refund) for 2012Part 2- Tax PlanningThe Alberts are considering buying another house. Their house mortage payments would increase by $500 (to $1500) per month, which includes a $250 increase in interest and a $100 increase in property tax. The Alberts would like to know how much the mortage payments would increase net of any change in their income tax. Write a letter to the Alberts that contains your advice.Q259. Alfred E. Old and Beulah A. Crane, each age 42, married on September;7, 2011. Alfred and Beulah will file a joint return for 2012. Alfred?s;Social Security number is 111-11-1111. Beulah?s Social Security;number is 123-45-6789, and she adopted ?Old? as her married name. They;live at 211 Brickstone Drive, Atlanta, GA 30304.Alfred was divorced from Sarah Old in March 2010. Under the divorce agreement,Alfred;is to pay Sarah $1,250 per month for the next 10 years or until Sarah?s;death, whichever occurs first. Alfred pays Sarah $15,000 in 2012. In;addition, in January 2012,Alfred pays Sarah $50,000, which is designated as being her share of the marital property.Also, Alfred is responsible for all prior years? income taxes. Sarah?s Social Security number is 123-45-6788.Alfred?s;salary for 2012 is $150,000, and his employer, Cherry, Inc. (Federal;I.D. No. 98-7654321), provides him with group term life insurance equal;to twice his annual salary. His employer withheld $24,900 for Federal;income taxes and $8,000 for state income taxes. The following amounts;were withheld for FICA taxes: $4,624 ($110,100 ?4.2%) for Social Security and $2,175 ($150,000 ? 1.45%) for Medicare.Beulah recently graduated from law school and is employed by Legal Aid Society,Inc.;(Federal I.D. No. 11-1111111), as a public defender. She receives a;salary of $40,000 in 2012. Her employer withheld $7,500 for Federal;income taxes and $2,400 for state income taxes. The following amounts;were withheld for FICA taxes: $1,680 ($40,000 ?4.2%) for Social Security;and $580 ($40,000 ? 1.45%) for Medicare.Beulah has $2,500 in qualified dividends on Yellow Corporation stock she inherited.Alfred;and Beulah receive a $1,900 refund on their 2011 state income taxes.;They itemized deductions on their 2011 Federal income tax return (total =;$15,000). Alfred andBeulah pay $4,500 interest and $1,450 property;taxes on their personal residence in 2012. Their charitable;contributions total $2,400 (all to their church). They paid sales taxes;of $1,400 for which they maintain the receipts.Compute the Olds? net;tax payable (or refund due) for 2012. If you use tax forms for your;solution, you will need Form 1040 and Schedules A and B. Suggested;software:H&R BLOCK At Home.


Paper#40211 | Written in 18-Jul-2015

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