TAX chapter 6 Homework

Stephanie is 12 years old and often assists neighbors on weekends by babysitting their children. Calculate the 2023 standard deduction Stephanie will claim under the following independent circumstances (assume that Stephanie's parents will claim her as a dependent). a. Stephanie reported $950 of earnings from her babysitting. Standard Deduction $_________

$1350 Stephanie can claim a standard deduction of $1,350, the greater of the minimum standard deduction ($1,250) or $400 plus her earned income ($950).

Clem is married and is a skilled carpenter. Clem's wife, Wanda, works part time as a substitute grade school teacher. Determine the amount of Clem's expenses that are deductible for AGI this year (if any) under the following independent circumstances: Note: Leave no answer blank. Enter zero if applicable. b. Clem and Wanda own a garage downtown that they rent to a local business for storage. This year they incurred expenses of $1,250 in utilities and $780 in depreciation. Deductible amount for AGI $_______

$2030 $2,030. The utilities and depreciation are deductible for AGI (rental activity).

Amelie, a retired physician, is 66 years old. Determine her standard deduction in 2023 under the following scenarios. c. Amelie is single and her 10-year-old granddaughter, Emma, lives with her. Amelie supports Emma and claims her as a dependent. Standard Deduction $_________

$22,650 Amelie's standard deduction would be $22,650 ($20,800 based standard deduction for head of household plus $1,850 since Amelie is 65 or older).

Amelie, a retired physician, is 66 years old. Determine her standard deduction in 2023 under the following scenarios. a. Amelie is married to Roget, age 52, and they file jointly. Standard Deduction $__________

$29,200 Amelie and Roget's standard deduction would be $29,200 ($27,700 based standard deduction for married filing joint plus $1,500 since Amelie is 65 or older).

Clem is married and is a skilled carpenter. Clem's wife, Wanda, works part time as a substitute grade school teacher. Determine the amount of Clem's expenses that are deductible for AGI this year (if any) under the following independent circumstances: Note: Leave no answer blank. Enter zero if applicable. a. Clem is self-employed, and this year he incurred $525 in expenses for tools and supplies related to his job. Because neither was covered by a qualified health plan, Clem paid health insurance premiums of $3,600 to provide coverage for himself and Wanda (not through an exchange). Deductible amount for AGI $_________

$4,125 $4,125. The tools and supplies and the health insurance are deductible for AGI.

Penny, a full-time biochemist, loves stock car racing. To feed her passion, she bought a used dirt-track car and has started entering some local dirt-track races. The prize money is pretty small ($1,000 for the winner), but she really is not in it for the money. Penny reported the following income and expenses from her nights at the track: Prize money $ 2,500 Expenses: Transportation from her home to the races 1,000 Depreciation on the dirt-track car 4,000 Entry fees 3,500 Oil, gas, supplies, repairs for the dirt-track car 2,050 What are the tax effects of Penny's racing income and expenses assuming that the racing activity is a hobby for Penny? 1.Penny's racing income 2.Penny's racing expense 3.Gross Income for tax

1. Includible 2.Not deductible 3.Increases