Hi, I’m trying to explain the different situations for 2018 v. 2017 under the new tax cuts and jobs act. Please provide your input on how I should look at this.
Betty and Joe Sample are married taxpayers who file jointly. They have two dependent twin children,
age 19. The following are their 2017 tax information.
Income
Betty’s Wages ABC Unified School District 50,000.00
Net Schedule C Income Joe’s Online Retail Store – a sole proprietorship 100,000.00
[Memo – Wages paid to employees $30,000]
Net Rental Income 5,000.00
Deductions
Contributions to Joe’s Retirement account 5,500.00
Self-employed health Insurance premiums for the entire family 15,226.00
State and Local Income Taxes 9,181.00
Real estate taxes on primary home 7,350.00
Personal property taxes 235.00
Home acquisition mortgage interest – original debt dated 7/1/2015 18,000.00
Home Equity Interest – Equity line balance $ 75,000 3,000.00
Cash Donations 4,000.00
Betty and Joe are curious to know if they are better or worse off under President Trump’s new tax
reform.
I need internal tax memorandum explaining the Samples’ tax situation for 2018 v. 2017 under
The Tax Cuts and Jobs Act of 2017. You can safely assume their 2018 situation to be the same as 2017.
Please also include any advice you may have for the Samples.
Your memo can be in the form of Excel worksheet or Word document. Bonus
points will be awarded if your analysis includes correctly, Sec 199A deduction.
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