59. Daniel B. Butler and Freida C. Butler, husband and wife, file a joint return. The Butlers live at 625 Oak Street in Corbin, KY 40701. Dan’s Social Security number is 111–11–1111, and Freida’s is 123–45–6789. Dan was born on January 15, 1962, and Freida was born on August 20, 1962.
During 2012, Dan and Freida furnished over half of the total support of each of the following individuals, all of whom still live at home:
a. Gina, their daughter, age 22, a full-time student, who married on December 21, 2012, has no income of her own and for 2012 did not file a joint return with her husband, Casey, who earned $10,600 during 2012. Gina’s Social Security number is 123–45–6788.
b. Sam, their son, age 20, who had gross income of $6,300 in 2012, dropped out of college in October 2012. He had graduated from high school in May 2011. Sam’s Social Security number is 123–45–6787.
c. Ben, their oldest son, age 26, is a full-time graduate student with gross income of $5,200. Ben’s Social Security number is 123–45–6786.
Dan was employed as a manager by WJJJ, Inc. (employer identification number 11–1111111, 604 Franklin Street, Corbin, KY 40702), and Freida was employed as a salesperson for Corbin Realty, Inc. (employer identification number 98–7654321, 899 Central Street, Corbin, KY 40701). Information from the W–2 Forms provided by the employers is presented below. Dan and Freida use the cash method.
Line Description Dan Freida
1 Wages, tips, other compensation $74,000 $86,000
2 Federal income tax withheld $11,000 $12,400
3 Social Security wages $74,000 $86,000
4 Social Security tax withheld $3,108 $3,612
5 Medicare wages and tips $74,000 $86,000
6 Medicare tax withheld $1,073 $1,247
15 State Kentucky Kentucky
16 State wages, tips, etc. $74,000 $86,000
17 State income tax withheld $2,960 $3,440
Back to Top P. 4_50
Freida sold a house on December 30, 2012, and will be paid a commission of $3,100 (not included in the $86,000 reported on the W–2) on the January 10, 2013 closing date.
Other income (as reported on 1099 Forms) for 2012 consisted of the following:
Dividends on CSX stock (qualified) $4,200
Interest on savings at Second Bank 1,600
Interest on City of Corbin bonds 900
Interest on First Bank CD 382
The $382 from First Bank was original issue discount. Dan and Freida collected $16,000 on the First Bank CD that matured on September 30, 2012. The CD was purchased on October 1, 20010, for $14,995, and the yield to maturity was 3.3%.
Dan received a Schedule K–1 from the Falcon Partnership, which showed his distributive share of income as $7,000. In addition to the above information, Dan and Freida’s itemized deductions included the following:
Paid on 2012 Kentucky income tax $ 700
Personal property tax paid 600
Real estate taxes paid 1,800
Interest on home mortgage (Corbin S&L) 4,900
Cash contributions to the Boy Scouts 800
Sales tax from the sales tax table is $1,860. Dan and Freida made Federal estimated tax payments of $8,000. The Kentucky income tax rate is 4%.
Part 1—Tax Computation
Compute Dan and Freida’s 2012 Federal income tax payable (or refund due). If you use tax forms for your computations, you will need Form 1040 and Schedules A, B, and E. Suggested software: H&R BLOCK At Home.
If the Butler’s should itemize their deductions please be sure to use Schedule A.
Part 2: Dan plans to reduce his work schedule and work only half time for WJJJ in 2013. He has been writing songs for several years and wants to devote more time to developing a career as a song writer. Because of the uncertainty in the music business however, he would like you to make all computations assuming he will have no income from song writing in 2013. To make up for the loss of income Frida plans to increase the amount of time she spends selling real-estate she estimates that she will be able to earn $90,000 in 2013. Assume that all other income and expense items will be approximately the same as they were in 2012. Assume that sam will be enrolled in college as a full time student for the summer and fall semesters. Will the butlers have more or less disposable income after federal income tax in 2013. Write a letter to the butlers that contains your advice and write a memo for the tax files.
Why Choose Us
We value our clients. For this reason, we ensure that each paper is written carefully as per the instructions provided by the client. Our editing team also checks all the papers to ensure that they have been completed as per the expectations.
Professional Academic Writers
Over the years, our Acme Homework has managed to secure the most qualified, reliable and experienced team of writers. The company has also ensured continued training and development of the team members to ensure that it keep up with the rising Academic Trends.
Our prices are fairly priced in such a way that ensures affordability. Additionally, you can get a free price quotation by clicking on the "Place Order" button.
We pay strict attention on deadlines. For this reason, we ensure that all papers are submitted earlier, even before the deadline indicated by the customer. For this reason, the client can go through the work and review everything.
At Essay Writing Help, all papers are plagiarism-free as they are written from scratch. We have taken strict measures to ensure that there is no similarity on all papers and that citations are included as per the standards set.
Customer Support 24/7
Our support team is readily available to provide any guidance/help on our platform at any time of the day/night. Feel free to contact us via the Chat window or support email: email@example.com.
Try it now!
How it works?
Follow these simple steps to get your paper done
Place your order
Fill in the order form and provide all details of your assignment.
Proceed with the payment
Choose the payment system that suits you most.
Receive the final file
Once your paper is ready, we will email it to you.
Essay Writing Help has stood as the world’s leading custom essay writing services providers. Once you enter all the details in the order form under the place order button, the rest is up to us.
At Essay Writing Help, we prioritize on all aspects that bring about a good grade such as impeccable grammar, proper structure, zero-plagiarism and conformance to guidelines. Our experienced team of writers will help you completed your essays and other assignments.
Admission and Business Papers
Be assured that you’ll definitely get accepted to the Master’s level program at any university once you enter all the details in the order form. We won’t leave you here; we will also help you secure a good position in your aspired workplace by creating an outstanding resume or portfolio once you place an order.
Editing and Proofreading
Our skilled editing and writing team will help you restructure you paper, paraphrase, correct grammar and replace plagiarized sections on your paper just on time. The service is geared toward eliminating any mistakes and rather enhancing better quality.
We have writers in almost all fields including the most technical fields. You don’t have to worry about the complexity of your paper. Simply enter as much details as possible in the place order section.