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    Joe and Mary Smith filed a joint tax return for 2018. Joe owns a plumbing business that generated $265,000 in gross receipts. He deducted $88,000 in wages and various business expenses. The couple also owns a vacation rental property. They received $35,125 in rental income but deducted expenses and depreciation. They sold assets including a home, stock, and vacant lot, realizing capital gains. Their taxable income will be calculated based on wages, business income, rental income, capital gains, and other items like dividends and interest, accounting for applicable deductions and limitations.

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    Extra Credit

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    Joe and Mary Smith filed a joint tax return for 2018. Joe owns a plumbing business that generated $265,000 in gross receipts. He deducted $88,000 in wages and various business expenses. The couple also owns a vacation rental property. They received $35,125 in rental income but deducted expenses and depreciation. They sold assets including a home, stock, and vacant lot, realizing capital gains. Their taxable income will be calculated based on wages, business income, rental income, capital gains, and other items like dividends and interest, accounting for applicable deductions and limitations.

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    Joe and Mary Smith filed a joint tax return for 2018. Joe owns a plumbing business that generated $265,000 in gross receipts. He deducted $88,000 in wages and various business expenses. The couple also owns a vacation rental property. They received $35,125 in rental income but deducted expenses and depreciation. They sold assets including a home, stock, and vacant lot, realizing capital gains. Their taxable income will be calculated based on wages, business income, rental income, capital gains, and other items like dividends and interest, accounting for applicable deductions and limitations.

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    © All Rights Reserved
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    17 views3 pages

    Extra Credit

    Uploaded by

    irenemutheu66
    Joe and Mary Smith filed a joint tax return for 2018. Joe owns a plumbing business that generated $265,000 in gross receipts. He deducted $88,000 in wages and various business expenses. The couple also owns a vacation rental property. They received $35,125 in rental income but deducted expenses and depreciation. They sold assets including a home, stock, and vacant lot, realizing capital gains. Their taxable income will be calculated based on wages, business income, rental income, capital gains, and other items like dividends and interest, accounting for applicable deductions and limitations.

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    Joe & Mary Smith It’s All You CPA

    2018 Income Tax Organizer


    Joe & Mary Smith Married 5 years
    Children: Little Susie – Born November 15, 2018
    Filing Status Joint return in 2017
    Annual Support: Mary’s Mother
    Sole Support of Mother
    Lives in a Senior Care Home 4 Blocks from Joe & Mary
    Mary’s Wages: $42,000, Insurance Sales
    Joe’s profession: Sole Proprietor
    Plumbing Express
    2018 Revenue & Deductions

    Gross Receipts 265,000


    Wages 88,000
    Office Supplies 4,250
    Meals with Clients 2,600
    Golf & Client Entertainment 2,000
    Country Club Dues 4,100
    Plumbing supplies 36,750

    Miles Driven to job sites 12,625


    My plumbing equipment cost me $52,000.
    Home office used? Yes, I use a converted bedroom, It’s 300 square feet.
    My Total Home is 2,000 square feet
    Mortgage Interest 12,500
    Gardening & Maintenance 3,500
    Depreciation 4,000
    Real Estate Property Taxes 8,000
    Homeowners association fees 1,200
    Joe & Mary Rental
    Big Bear Cabin rented 125 days, used personal 20 days
    Rental Income 35,125
    Interest 12,500
    Taxes 8,600
    Maintenance & Repair 4,000
    Supplies 2,500
    Depreciation 22,000

    Mileage driven to Residence to collect rent, hire contractors 3,500


    Estimated hours managing rental 350
    Gains & Losses
    1. We sold our first home $425,000 on March 3
    Original Purchase date 2/5/2015
    Purchased for $165,000
    Remodeled bathrooms 22,000 in 2016
    2. Sold stock in Ford Motor Co 5,000 share @ $8 per share
    Purchased 2/2/16 for $60,000
    3. Sold vacant lot
    Inherited from grandparents Feb 1 2018
    Sold September 18, 2018
    Grandparents’ original purchased $5,000
    FMV when the trust transferred $125,000
    Sale price $135,000
    Sales commissions $5,000

    Other Items affecting Joe & Mary’s tax calculation:


    1. Dividends from Ford Stock $250

    2. No other itemized deductions

    3. Interest from Municipal Bonds $1,000

    4. Mary won an exacta at Santa Anita $520

    Calculate AGI and Taxable Income for Joe & Mary.


    Show ALL calculations, limitations, phase-outs, etc. that affect your calculations or that are effected
    by your calculations
    Your tax calculation should be summarized as follows
    Extra points if you complete using EXCEL

    Wages
    Dividends & Interest Income
    Income from Trade or Business
    Rental Income
    Capital Gain or Loss
    Other Income:
    GROSS INCOME
    AGI Adjustment “Above the Line” [Name/Description]
    ADJUSTED GROSS INCOME
    Itemized or Standard Deduction
    Qualified Business Income Deduction
    TAXABLE INCOME

    Nontaxable, deferred, excluded income, gains Losses:


    1
    2
    3

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