60.1K

Verified Solution

Link Copied!

QUESTION:

1. What is Omers tax liability or refund due after credits and prepayments? His CDC expenses credit % is 20%.

Omer, single, age 35, has one dependent (Maria, a qualifying child, age 7) that lived with Omer for all of 2020. Omer paid all costs of maintaining the household for himself and Maria. Omer's sister, Zelda, also lived with Omer for all of 2020. Zelda had no income, and Omer provided all of her support. In 2020, Omer had the following income items: Salary: $75,000 Interest on savings account (investment income): $2,500 Ordinary dividends (investment income; not qualified dividends): $1,500 Unemployment Compensation: $10,000 Gift from Omer's father: $10,000 Alimony from ex-wife (divorce finalized in 2014): $10,000 Omer paid the following expenses in 2020: Federal income taxes withheld on wages: $4,000 State & local income taxes withheld on wages: $1,000 Sales tax: $9,000 Property tax: $3,000 Medical expenses: $1,000 Food and clothes for Maria: $4,000 Investment interest: $5,000 Food and clothes for himself: $5,000 Childcare expenses so Omer can work: $2,000 HSA Contribution (Omer has a HDHP): $2,000 Charitable contribution (cash): $2,500 Unreimbursed employee business expenses: $500 Car payment: $6,000 Mortgage interest on $300,000 mortgage used to purchase primary residence: $3,000

Answer & Explanation Solved by verified expert

See Answer