Peter and Kay are married and will file a joint return. Peter was unemployed for six months during 2023. They brought in the following tax documents to Jacob to prepare their return:

Question

Peter's Form W-2 reporting wages of $22,400.
Kay's Form W-2 reporting wages of $55,300.
Peter's Form 1099-G reporting unemployment compensation of $5,200.
How much of this income is taxable and must be reported on their federal return?

Answer 1

To determine how much of Peter and Kay's income is taxable and must be reported on their federal return, we need to consider the income coming from both W-2 forms and the 1099-G reporting unemployment compensation.

1. Peter's W-2 Income: $22,400 (this is taxable income).
2. Kay's W-2 Income: $55,300 (this is also taxable income).
3. Peter's 1099-G (Unemployment Compensation): $5,200 (this is generally considered taxable income).

To calculate the total taxable income:

• Total W-2 income: $22,400 + $55,300 = $77,700
• Total unemployment compensation: $5,200

Total Taxable Income Calculation:

Total Taxable Income = Total W-2 Income + Unemployment Compensation
Total Taxable Income = $77,700 + $5,200 = $82,900

Conclusion:

The total amount of income that is taxable and must be reported on their federal return is $82,900.