Busin ess-Related Expenses. Mike, a self-employed
consultant, incurs the following business-related expenses in 2019:
Mike earned $130,000 of gross income from his consulting
business and had $12,000 of interest and dividend income in 2019 before any of
the above expenses are deducted. He has $20,000 of itemized deductions. Mike is
married and files a joint return with his wife, Ann, who has no income.
a. What is the amount of Mike’s deduction for
business-related expenses for 2019?
b. What is Mike and Ann’s AGI and taxable income in 2019,
assuming he is married and files a joint return, and ignoring the
self-employment tax?
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