DeVry University Chicago Tax Filings of Joseph Smith and Rita Smith Case Study
Joseph L. Smith (age 45, Social Safety quantity 145-26-9210) and Rita M. Smith (age 43, Social Safety quantity 142-46-5108) are husband and spouse. They dwell at 1650 Belmont Avenue, Chicago, IL 60615. David is a self-employed CPA and Rita is a 3rd grade instructor. They’ve two youngsters: Blake (age 5, Social Safety quantity 310-51-2108) and Amelia (age three, Social Safety quantity 314-62-8924).
In 2018, Joseph earned $182,000 and Rita earned $46,000. The Smith household has medical protection by way of the varsity system for which Rita works. As an worker, Rita had $9,500 of federal tax withheld, $2,300 of IL state tax withheld, and the required Social Safety and Medicare taxes.
Joseph has an workplace with enterprise bills for 2018 as follows:
Should fill out the next kinds from the standards given:
Kind 1040
Schedule A
Schedule C
Schedule SE
Schedule 4562
Schedule 2441
Schedule E
Merchandise Quantity
Workplace Lease $24,000
Workplace Provides $eight,000
Web Prices $1,200
Telephone System Prices $four,800
Promoting Bills $1,800
Postage Prices $1,500
Audit/Tax Software program Prices $20,000
Enterprise Items $400
The promoting bills included native newspaper ads, digital advertising, and direct advertising flyers. The enterprise presents have been $40 present certificates given to his 10 largest purchasers in appreciation for his or her enterprise.
Joseph bought a 2017 Honda Civic in 2017. In 2018, he drove 24,000 enterprise miles and 6,000 private miles, and makes use of the usual mileage methodology for tax functions.
In 2018, Joseph made estimated quarterly federal tax funds of $18,000/quarter and estimated quarterly IL state tax funds of $three,000. All of the funds have been made inside calendar 2018. Joseph additionally contributed $eight,000 to his SEP account.
Rita purchased varied provides for her classroom, however didn’t intently monitor expenditures and thus solely needs to take the allowed educator bills deduction. Her instructor’s license was additionally renewed in 2018 for $125.
Blake and Amelia are each in day care on the Riley Day Care Heart at 1325 Lake Road, Chicago, IL 60612 (EIN 36-2875647). They’re solely in day take care of 9 months of the 12 months (weekly cost of $240.00/week), as a result of Rita doesn’t work throughout the summer time.
Along with the wages and bills as detailed, the Smiths have the next documented earnings and bills:
Merchandise Quantity
Curiosity earnings from CDs $1,800
Curiosity Revenue from Collection EE $four,000
Authorities Bonds Mortgage Curiosity on Principal Residence $15,000
Property taxes on Residence $eight,000
PMI Insurance coverage Funds $three,000
Money Charitable Contributions $2,500
Non-Money Contributions (Used Clothes to Salvation Military) $350
The Smiths itemized deductions in 2017. The federal tax refund was $three,500 and the IL state tax refund was $600.
As well as, the Smiths personal rental property (a “two flat” in Chicago) which they’ve rented out for all the 12 months. Complete rental earnings was $30,000. Rental property associated bills have been as follows:
Merchandise Quantity
Mortgage Curiosity on Rental Property $13,000
Property Tax $9,000
Repairs on Rental Models $2,600
Depreciation on Rental Models (utilizing SL Depreciation) $three,500
Utilities $three,000
Landscaping $500
