58. Daniel B. Butler and Freida C. Butler, mate and consort, perfect a knee come-back. The Butlers subsist at 625 Oak Street in Corbin, KY 40701. Dan’s SSN is 111-11-1112, and Fredia’s is 123-45-6789. Dan was born on 1/15/67.
During 2018 Dan and Freida supplied aggravate half of the whole foundation of each of the subjoined individuals, all of wabode quiescent subsist at abode:
Gina, their daughter 22 a unmeasured span tyro who married on 12/21/18 has no allowance of her own and for 2018 did not perfect a knee come-back following a while her mate Casey, who obtained $10,600.00 during 2018. Gina’s SSN is 123-45-6788
Sam their son is 20 who had a impure allowance of 6300 in 2018 dropped out of train in October 2018. HE had graduated tall train in May 2018. Sam’s SSN is 123-45-6787.
Ben their oldest son age 26 is a unmeasured span graduate tyro following a while impure allowance of 5200. Ben’s SSN is 123-45-6786
Dan was occupied as a supervisor by WJJJ, inc. EIN # 11-11111111, 604 Franklin Street Corbin KY 40702, and Freida was occupied as a salesperson for Corbin Realty KY 40701. Selected notification from the W-2 forms supposing by the employers is presented under. Dan and Freida use the money mode.
Line Description Dan Freida
1 Wages,tips, other compensation 74,000 86,000
2 Federal allowance tax following a whileheld 11,000 12,400
17 State allowance tax following a whileheld 2,960 3,440
Freida sold a scion on 12/30/18 and accomplish be remunerated a message of $3100(not intervening in the 86k reputed on W-2) on the January 10, 2019 bankruptcy limit.
Other allowance (as reputed on 1099 forms) for 2018 consisted of the subjoined:
Dividends on CSX store (qualified) 700.00
Interest on savings at Second bank 1600.00
Interest on City of Corbin bonds 900.00
Interest on First Bank CD 382. 00
The $382 from First Bank was former result abatement. Dan and Freida placid 16k on the First Bank CD that mellow on 09/30/18. The CD was purchased on 10/1/16 for $14,995.00 and the furnish to ripeness was 3.3%
Dan ordinary a Catalogue K-1 from Falcon Partnership which showed his dispensation portion-out of allowance as $7,000.00. In adduction to the overhead notification, Dan and Freida’s itemized impoverishment intervening the subjoined:
Remunerated on 2018 Kentucky allowance tax 700.00
Personal resources tax remunerated 600.00
True property taxes remunerated 1,800.00
Interest on abode mortage (Corbin S&L) 4,900.00
Money contributions to the Boy Scouts 800.00
Sales tax from the sales tax consideration is $1,860. Dan and Freida made estimated tax payments of $8000.00. The Kentucky allowance tax rebuke is 4%.
Part 1- Tax Computation
Compute Dan and Freida’s 2018 icome tax payefficacious (or repay due) If you use tax forms for the computations you accomplish insufficiency Form 1040 and Schedules A, B and E
Part 2 Tax Planning
Dan plans to contract his production catalogue andonly production half span for WJJJ in 2019. He has been agreement carols for separate years and wants to dedicate his span to developing a walk as a carolwriter. Because of the doubt in the music duty, eventually, he would affect you to perform all computations grand that he accomplish bear no allowance from carol agreement in 2019. To perform up for the damage of allowance Freida plans to extension the total of span she spends selling true property. She estimates that she accomplish be efficacious to obtain $90k in 2019. Assume that all other allowance and cost items accomplish be approximately the identical as they were for 2019. Assume that Sam accomplish be in enrolled in train as a unmeasured span tyro for the summer and droop semesters. Accomplish the Butlers bear more or hither disposefficacious allowance (following Federal allowance tax) in 2019? Write a communication to the Butlers that contains your order and arrange a memo for the tax perfects.