Essay on Tax Memo

On Wendy’s Intake and Interview sheet, she answered “Unsure” to the question, “Can anyone claim you or your spouse on their tax return?”

John and Janet Baker are husband and wife and maintain a household of 7, including Janet and John. Calvin and Florence Carter are Janet’s parents, who are retired. During the year, they received $19,000 in nontaxable funds (disability income, interest on municipal bonds and Social Security benefits) from which $8,000 was equally spent between them on clothing, transportation, and recreation. The remaining $11,000 was invested in tax-exempt securities. Janet Baker paid $1,000 for her mother’s dental work and $1,200 premium on her father’s own life insurance policy. Janet’s father,

The federal and state governments provide the American citizens with all of the basic necessities within our communities and society that is taken for granted. Programs responsible for assistance in times of need, providing a quality standard of living, and maintaining the strongest military in the world costs incomprehensible amounts of money and could never exist without taxes from the American people. Taxes are payments made by individuals and businesses to support the government and its services. The constitution grants that congress “shall have the power to lay and collect taxes, duties, imposts, and excises and to pay the debts and provide for the common defense and general welfare of the people”. Taxes paid by Americans redistribute

The most advantageous filing status for spouse A and spouse B to use is married filing jointly.

Married Filing Jointly would be the most beneficial for this couple because it will allow them to stay at a lower tax bracket and also qualify to take a higher standard deduction and higher deduction on the sale of their home than they would as individuals.

Arlen is required by his divorce agreement to pay alimony of $2,000 a month and child support of $2,000 a month to his ex-wife Jane. What is the tax treatment of these two payments for Arlen and Jane?

The couple can exclude the full $296,000 gain since they are filing jointly and per the IRS can exclude up to $500,000.

together under same house and that was the only thing they had. The husband does his

husband losing his job and not being able to pay for child support for a couple of months, her wage not

In the documentary Paycheck to Paycheck: The Life & Times of Katrina Gilbert, the story of a single mother and her struggle to make ends meet is told. Living in a trailer in Chattanooga, Tennessee, Katrina Gilbert illustrates the challenges of single motherhood while living in poverty. Throughout the film the audience catches a glimpse of the difficulties Katrina faces with respect to raising her children, generating income, taking care of her health, and settling her divorce. With three children to take care of, Katrina has to always put herself last on her list of people to take care of, and in the documentary, we see how difficult that can be. Katrina Gilbert separated from her husband of ten years, whom she shares three children with, because

1. All distributions (excluding reasonable salary) to Paula and Mary will be taxed as dividends to them. And the corporation could not deduct this part of distribution.

The marriage had strains on it already with his parents using separated bedrooms. With his father in Washington D.C. His mother stayed in Minnesota during the summer.

Tax deductions for single mothers can also be enjoyed immensely by filing as the Head of the Household. In order to use this single mother tax credit you must one, separated from your spouse for a minimum of 6 months, and two you must have custody of your children, and three you must have paid for a minimum of 50 percent of the amount of money needed to pay for your home and all its necessities. (It is important to note that only one parent can claim a child(ren) as a dependent and enjoy the tax benefit, so it is important to discuss this.)

Since Mr. and Mrs. Green intend on having joint custody of the children, it looks as if all aspects of rearing the children, including expenses as well as decision-making would be shared among the parents. Although it is "shared", that does not signify that it will be equally shared. The court will determine, based on the formula contained in the Kentucky Child Support Guidelines, what each parent pays. Furthermore, since Mrs. Green is without income as a homemaker, it seems as though some sort of child support payment should be paid in regards to the children while they are residing in her home. Also, if Mr. Green takes a job, earning less income due to health problems, this may affect the amount of child support he would be obligated to pay, but it shouldn't keep him from being required to pay some sort of child support. This job change can cause the court to deviate from the guidelines. However, the court may look at Mrs. Green's unemployment as being voluntary. Thus, the court may not use that issue in determining the child support Mr. Green should be obligated to pay. The court will probably not order Mrs. Green to obtain employment, but in looking at the facts, there is no valid reason as to her unemployment, and it may be in the

a. For instance, for the best case scenario, a married couple with two children and a single earner receives only 4.74 percent if the earner was born in 1932 (Heritage Foundation, 2000).