Jack,age 30 and married with no dependents,is a self-employed individual.For 2012,his self-employed business sustained a net loss from operations of $10,000.The following additional information was obtained from his personal records for the year: Based on the above information,what is Jack's net operating loss for the current year if he and his spouse file a joint return?

Question

Jack,age 30 and married with no dependents,is a self-employed individual.For 2012,his self-employed business sustained a net loss from operations of $10,000.The following additional information was obtained from his personal records for the year:  Based on the above information,what is Jack's net operating loss for the current year if he and his spouse file a joint return?

Quizplus · Accepted Answer

According to the information, Jack's net loss from his self-employed business was $10,000, which means his net operating loss is also $10,000. Since he has no dependents, his standard deduction for 2012 would be $11,900. Therefore, when he and his spouse file a joint return, they can deduct the entire $10,000 loss, resulting in a taxable income of $21,900 ($31,900 - $10,000). This amount is still within the 15% tax bracket, so their tax liability would be $1,935. Therefore, his net operating loss for the current year is $10,000.

Jack,age 30 and Married with No Dependents,is a Self-Employed Individual