ACCT553 Federal Taxes & Mgmt

Why is income-shifting considered such a major tax planning concept? 35. Jim files his return one month after the due date and pays the remaining $8,000 of tax owed by him. What are his delinquency penalties? 37. Olivia is being audited by the IRS. The revenue agent determines that certain expenses that were deducted on her return are not valid, and he accordingly makes adjustments to her tax liability. Upon receipt of her 30-day letter, she phones you, a CPA, for advice regarding possible future action on the matter. What options would you discuss with Olivia? 33. Compute the taxable income for 2020 under each of the following circumstances: Jim is married and files a joint return. Jim and his wife have two dependent children. They have adjusted gross income of $30,000 and itemized deductions of $24,500. Jim is single with no dependents. His adjusted gross income is $50,000 with itemized deductions of $10,800. Jim is a full-time college student under 24 supported by his father. Jim earned $2,600 from a part-time job and had $500 of interest income. His itemized deductions were $600. Jim is married but files separately and claims two dependent children. His adjusted gross income is $65,000 and he claims $12,900 of itemized deductions. Jim’s wife also itemizes on her return. Assume the same situation as in (d), but Jim’s itemized deductions are only $10,900. 34. Duke and Pat Collins have adjusted gross income of $358,000. They have itemized deductions of $20,000 consisting of $8,000 in medical expenses that exceed 10% of adjusted gross income, $3,000 in property taxes, $4,000 in housing interest, and $5,000 in miscellaneous itemized deductions. What is the amount of their itemized deductions?