Using the case data from the attached Case 1, complete Form 1040. Complete the attached template that has the respective tax forms and schedules required to complete the return. Complete all of the remaining parts of your respective business tax return for which there is information. Also, address any instructor feedback provided in the milestone submissions.
Some of the forms in the template for the Portfolio Project have only the front page (i.e. Form 1040 and Schedule D). You do not have to complete the second page for those forms, only the front page provided in the template. Schedule C is also not included in the template so if you are doing the option with that item, please just calculate the net income or loss and enter the amount on the appropriate line of Form 1040.
Portfolio Project Case 1
Comprehensive Tax Problem – Option 1
Taxpayer Information
Name: John Washington
Address: 3450 Green St.
Miami, FL 54321
DOB: 5/5/1960
Filing Status: Married
SSN: 434-20-2020
Occupation: Engineer
Name: Debra Washington
Address: 3450 Green St.
Miami, FL 54321
DOB: 7/7/1962
Filing Status: Married
SSN: 411-21-4568
Occupation: Teacher
INCOME INFORMATION:
Wages and Compensation
The following information is taken from John Washington’s 2017 Form W-2 Wage and Tax Statement:
| Box 1 – Wages, tips, and other compensation | 80,000 |
| Box 2 – Federal Withholding | 12,500 |
| Box 17 – State Income Tax Withholding | 2,000 |
The following information is taken from Debra Washington’s 2017 Form W-2 Wage and Tax Statement:
| Box 1 – Wages, tips, and other compensation | 42,000 |
| Box 2 – Federal Withholding | 3,500 |
| Box 17 – State Income Tax Withholding | 750 |
Interest and Dividends
John had interest income from a savings account from Everest Bank of $500.00
Debra had dividend income of $550 from Blue Co. stock.
Capital Gains
John had the following stock transactions in 2017:
He sold 1,000 shares of Apex Co. for $ 12,000 on June 7, 2017, which he purchased on April 1, 2017 for 25,000
Rental Real Estate
The couple owns a rent house which he purchased on July 1, 2014. The income and expenses of the rental real estate unit are as follows:
Rental income $12,000
Property taxes $1,500
Depreciation $1,000
Repairs and Maintenance $750
Insurance $2,000
Other Transactions in 2017
- Debra had educator expenses in 2017 of $450.00
- John had gambling winnings of $1,000.
- John was the beneficiary of his mother’s life insurance policy.
His mother died in 2017 and he received $50,000 under this policy.
- Debra paid $700 in student loan interest.
| Form 1040 Department of the Treasury | Internal Revenue Service | 2016 | |||||||||||
| U.S. Individual Tax Form | |||||||||||||
| OMB No.1545-0074 | IRS Use Only–Do not write or staple in this space | ||||||||||||
| For the year Jan.1–Dec. 31,2016, or any other tax year beginning | ,2016, | ,20 | See Separate Instructions | ||||||||||
| Your first name and initial | Last name | Social Security Number | |||||||||||
| If a joint return, spouses first name and initial | Last name | Spouse Social Security Number | |||||||||||
| Home address( number and street). If you have a P.O. Box, see instructions | Make Sure that the SSN(s) above | ||||||||||||
| and on line 6c are correct | . | ||||||||||||
| City, town, or post office, state, and zip code. If you have a foreign address, also complete spaces below (see instructions). | Presidential Election Campaign | ||||||||||||
| Check here if you, or your spouse if filing jointly, | |||||||||||||
| Foreign country name | Foreign province/state/country | Foreign postal code | checking this box below will not change your tax | ||||||||||
| refund. | you | spouse | |||||||||||
| Filing Status | 1. Single | 4.Head of Household (with qualifying person.) (See instructions.) If | |||||||||||
| Check only one box | 2.. married filing jointly | the qualifying person is a child but not your dependent, enter this | |||||||||||
| 3. Married filing separately. Enter spouse’s SSN above | child’s name here | ||||||||||||
| and full name here. | 5. Qualifying Window(er) with dependent child | ||||||||||||
| Exemptions | 6a Yourself. If someone can claim you as a dependent, do not check box 6a | ] | Boxes checked | ||||||||||
| b spouse | ] | on 6a and 6b | |||||||||||
| If more than four | c. Dependents | ||||||||||||
| dependents, see | (1) First name | Last name | (2) dependents | (3) dependents | (4) check if child under age 17 | No. of children | |||||||
| instructions and | social security number | relationship to you | qualifying for tax credit see | on 6c who: | |||||||||
| check here | instructions. | lived with you | |||||||||||
| did not live with you | |||||||||||||
| due to divorce or | |||||||||||||
| separation | |||||||||||||
| (see instructions) | |||||||||||||
| Dependents on | |||||||||||||
| 6c not entered | |||||||||||||
| above | |||||||||||||
| d. Total number of Exemptions Claimed | Add numbers on lines above | ||||||||||||
| Income | 7 | Wages, salaries, tips, etc. Attach Forms (W-2) | 7 | ||||||||||
| 8a | Taxable interest. Attach Schedule B if required | 8a | |||||||||||
| Attach Form(s) | b | Tax-exempt interest. Do not include on line 8a | 8b | ||||||||||
| W-2 here. Also | 9a | Ordinary dividends. Attach Schedule B if required | 9a | ||||||||||
| attach Forms(s) | b | Qualified dividends | 9b | ||||||||||
| W-2 and 1099-R | 10 | Taxable refunds, credits, or offsets state or local income taxes | 10 | ||||||||||
| if tax was withheld. | 11 | Alimony received | 11 | ||||||||||
| 12 | Business income or (loss). Attach Schedule C or C-EZ | 12 | |||||||||||
| If you did not | 13 | Capital gain or (loss). Attach Schedule D if required. If not required, check here | 13 | ||||||||||
| get a W-2, | 14 | other gains or (losses). Attach Form 4797 | 14 | ||||||||||
| see instructions | 15a | IRA distributions | 15a | b Taxable amount | 15b | ||||||||
| 16a | Pensions and annuities | 16a | b Taxable amount | 16b | |||||||||
| 17 | Rental real estate, royalties, partnerships, S corporations, trusts, etc. Attach Schedule E | 17 | |||||||||||
| 18 | Farm income or (loss). Attach Schedule F | 18 | |||||||||||
| 19 | Unemployment compensation | 19 | |||||||||||
| 20a | Social security benefits | 20a | b Taxable amount | 20b | |||||||||
| 21 | other income. List type and amount | 21 | |||||||||||
| 22 | combine the amounts in the far right column for lines 7 through 21. This is your total income | This is your total income. | 22 | ||||||||||
| Adjusted | 23 | Educator expenses | 23 | ||||||||||
| Gross | 24 | Certain business expenses of reservists, performing artists, and fee-basis government. Attach Form 2106 or 2106-EZ | 24 | ||||||||||
| Income | |||||||||||||
| 25 | Health-savings account deduction. Attach Form 8889 | 25 | |||||||||||
| 26 | Moving Expenses. Attach Form 3903 | 26 | |||||||||||
| 27 | Deductible part of self-employment tax. Attach Schedule SE | 27 | |||||||||||
| 28 | Self-employed SEP, SIMPLE, and qualified plans | 28 | |||||||||||
| 29 | Self-employed health insurance deduction | 29 | |||||||||||
| 30 | Penalty on early withdrawal of savings | 30 | |||||||||||
| 31a | Alimony paid b. Recipient’s SSN | 31a | |||||||||||
| 32 | IRA deduction | 32 | |||||||||||
| 33 | Student loan interest deduction | 33 | |||||||||||
| 34 | Tuition and fees. Attach Form 8917 | 34 | |||||||||||
| 35 | Domestic production activities deduction. Attach Form 8903 | 35 | |||||||||||
| 36 | Add lines 23 through 35 | 36 | |||||||||||
| 37 | Subtract line 36 from line 22. This is your adjusted gross income. | 37 | |||||||||||