ACC 5170
Tax Return Project
Winter 2016
Use
the next data to organize the varied schedules/varieties for Luke and Ann
which are indicated on the category schedule of assignments. Additionally, you will use this
data (and the knowledge from the varied schedules that you should have
ready) to organize a federal type 1040 for Luke and Ann for 2015. Be
certain to incorporate all crucial varieties and schedules to finish the tax return
even when they weren’t ready as particular person assignments. Additionally, please put all
varieties on your accomplished Type 1040 within the correct order per the IRS attachment
directions. It’s possible you’ll receive the required varieties and directions from the IRS
web site: .irs.gov/”>www.irs.gov
which has a varieties and publications tab.
The tax return submitted and the varied schedules MUST BE HAND WRITTEN.
For
the person type submissions and for the ultimate type 1040, it’s essential to put together
the duvet sheet (final web page of this doc) that particulars any assumptions made
concerning points on the person varieties or on the tax return as an entire. Place
the finished assumptions sheet on prime of your varieties or tax return once you
submit the completed merchandise. (Ensure
your accomplished tax varieties are constant together with your ultimate said assumptions.) The duvet sheet could also be typed. It’s possible you’ll add further rows to the duvet
sheet if crucial.
Additionally,
when you mix any numbers to position them on the varieties or the tax return please
present the element on the assumptions sheet. Additionally make sure you label any gadgets
positioned on the varieties or tax return to allow them to be recognized.
Particular
directions on your preliminary submission of Schedule A:
**Be aware:
these directions solely apply to the schedule that can be submitted earlier than the
ultimate return is due.
For
functions of the preliminary Schedule A, use $100,000 because the Adjusted Gross Revenue
quantity. (For the ultimate Schedule A you
will use your computed AGI quantity, so you will have to revise the Schedule A to
mirror the computed AGI earlier than you flip it in together with your ultimate tax return.)
Any
questions, submit to the dialogue discussion board for this undertaking and e-mail me that you just
have posted a Question Assignment to the dialogue discussion board.
Luke Thompson, 48, Social Safety Quantity
123-45-6789, is a self-employed architect. His gross earnings is $205,000. In 2015,
he paid estimated taxes of $33,800. His spouse, Ann, 45, Social Safety Quantity
123-48-9012, is an elementary faculty trainer. Her W-2 earnings had been $46,000.
She had $6,050 withheld in federal tax.
Luke and Ann’s son, Samuel, 23, Social
Safety quantity, 456-23-4556, a full-time school scholar, graduated from
school in Could of 2015 however nonetheless lives at residence and his mother and father pay his residing
bills. His W-2 earnings had been $25,000; he had $four,000 withheld in federal
taxes. Samuel is saving his earnings for
graduate faculty which he hopes to attend in a few years.
Their daughter, Jennifer, 9, Social
Safety Quantity 245-78-8978, is in elementary faculty and has earnings of $9,500
from an element time modeling job. All her earnings are deposited in an funding
account for her future.
Ann’s mom, Mary McIntyre, 77, Social
Safety Quantity 345-67-8910, has lived with the household since November 2013,
apart from 4 months in 2015, when she was convalescing in a nursing residence
from a hip fracture. She receives $12,000 from Social Safety. Mary additionally
receives a taxable pension, reported as $eight,000 on her 1099-R.
Luke has a couple of enterprise bills. They
embody:
v $5,821 on workplace provides.
v 1,350 for promoting.
v $6,700 on blueprints for jobs.
v $350 for printing.
v $1,100 on permits for jobs.
v $1,423 for residence present charges.
v $10,000 for a part-time worker.
v Complete Social Safety taxes referring to this worker of $1,240, and
Medicare taxes of $290 (contains each the employer and worker parts). Federal earnings taxes (withholding) had been additionally
paid, in addition to $56 in federal unemployment taxes.
v $349 for skilled journals associated to structure.
v $2,400 (a $200 month-to-month flat fee) for his cellular phone, which is used 85%
for enterprise.
v $543 for lengthy distance enterprise cellphone calls positioned on his residence
cellphone.
v Luke belongs to a number of native Chambers of Commerce. Throughout 2015, he paid $360 in dues.
v $2,348 for numerous tickets to soccer video games that he took his
purchasers to.
v Luke paid $15,000 in nation membership dues for the 2015 tax yr. Your complete
household makes use of the membership for swimming, sports activities actions, and eating. Luke used the
membership to entertain a number of of his purchasers in the course of the yr. His use of the membership
was 18% of the entire use of the membership. He spent $three,320 for enterprise meals on the
nation membership and $four,950 for golf charges when he and his purchasers performed golf at
the membership. Every time he entertained
purchasers, enterprise was mentioned earlier than, throughout and/or after or meals at
the membership.
v Luke additionally incurred the next enterprise bills to attend a number of
structure conferences in the course of the tax yr. All conferences had been within the
United States.
o Airfare $2,650
o Lodge 1,229
o Meals 2,142
o Transportation 220
o Convention charges 1,190
He makes use of one room of the home as an workplace
(1/16 of the entire sq. footage of the home). The home was bought on August 5, 2012 for
$401,000, of which $75,000 was allotted to the acquisition worth of the lot. The house is 2,800 sq. toes. Ann additionally typically makes use of this room to work on her
craft tasks. The room can be used for out of city visitors who go to. Some bills associated to this residence workplace
embody
Utilities (whole
for the home) 2,590
Insurance coverage (whole
for the home) 1,450
Portray of the
room
600
In June of 2015 Luke bought the
following belongings to be used in his enterprise. (All different belongings he makes use of in his
enterprise had been bought a variety of years in the past and had been both expensed or have
been utterly depreciated earlier than this yr.)
All of the just lately bought belongings are used 100% for enterprise. As a result of he anticipates his earnings growing
considerably subsequent yr, he doesn’t want to expense any of the purchases nor
declare any further first yr depreciation he could be eligible for.
Used Desk $three,750
File Cupboard 2,450
Laptop 5,850
Bookcases three,725
Printer/Copier 2,025
Luke has fastidiously saved a log of his 12,900
miles spent driving to purchasers and returning to his residence workplace every day. He
visits just one consumer a day. He drives a 2012 Volkswagen Passat, which they
paid off in 2013. He bought the automotive for $28,700. He saved no fuel, upkeep or another
auto-expense receipts.
Lukeâs employer identification quantity for
his enterprise is 38-6543210.
Ann accomplished her Masters diploma in
elementary schooling in 2015, having determined that the superior diploma would
enhance her work expertise and enhance her wage and marketability. Persevering with
schooling can be required to maintain her instructing certification underneath state regulation,
so like a whole lot of lecturers she felt it made sense to work on a Masters and never
simply take numerous courses. In 2015, she totally paid tuition of $7,500.
Ann additionally subscribes to a variety of instructing
journals. She feels they Help her enhance her expertise at work and make her a
higher worker. She spent $250 on these
journals and he or she additionally spent $350 on provides for her classroom.
Ann, who additionally likes to make and promote crafts,
had gross receipts of $7,320 from this exercise. The supplies for the crafts
she bought price her $four,315; different miscellaneous bills (advertising and marketing and craft
present charges and postage) totaled $1,805.
That is the primary yr that Ann has tried to promote any of her
crafts. Since she feels she was
profitable, she plans to proceed this exercise into the longer term as an element time
enterprise.
In 2015, Luke and Ann took out a house
fairness mortgage of $75,000. Of that sum, they spent $26,000 on a brand new Ford Fusion
which Ann drives and for which in addition they paid $1,560 in gross sales tax. They used
$24,000 to pay the nursing-home invoice that Mary could not pay herself. They paid
$2,550 in curiosity on the house fairness mortgage.
Different data:
Luke and Ann
earned taxable curiosity of $2,002 from First Nationwide Financial institution.
Ann had $830 in
curiosity from an curiosity bearing checking account at Chase Financial institution.
Luke had $150 in
curiosity from an curiosity bearing checking account at Second Nationwide Financial institution.
Luke obtained $6,740
in curiosity from U.S. Treasury Bonds.
Ann obtained
$four,780 in curiosity from State of Kentucky bonds.
Ann obtained
$2,402 in abnormal (and qualifying) dividends from Normal Electrical inventory she
held individually
Samuel obtained
$112 in curiosity from an curiosity bearing checking account at PDQ Financial institution.
Jennifer
obtained $1,360 in abnormal (and qualifying dividends) from her funding
account at TD Ameritrade. These dividends had been reinvested within the account.
Luke obtained
$2,440 in abnormal (and non-qualifying) dividends from Intel inventory he held
individually.
They paid $9,500
in actual property taxes and $15,100 in curiosity on their unique mortgage. (Mortgage
quantity is lower than $1,000,000)
They made financial
charitable contributions of $12,530 and have receipts. Luke additionally contributed
design companies that had been auctioned off by the Alachua Animal Shelter (a
certified charitable group) on August 15, 2015. He usually prices $500 for such companies
and the profitable bid on the public sale was $300.
The Thompsons additionally donated outdated garments to the Salvation Military,
Gainesville, Florida. The clothesâ
thrift store worth was $350 and the Thompsons bought them at numerous instances
for $1,000.
Luke and Ann and
their kids had $three,200 of medical bills and $5,400 of dental bills
that weren’t coated by insurance coverage (The familyâs insurance coverage is supplied by Annâs
employer as part of her fringe profit package deal. The worth of the insurance coverage premiums for 2015
is $14,500. The Thompsons additionally spent $275 on over-the-counter medicine in the course of the
yr. Ann spent $650 on eyeglasses and
exams that werenât coated by insurance coverage.
The Thompson household
lives in Gainesville, Florida at 3908 143rd Avenue. They pay no state or native earnings taxes.
The Thompsonâs
had a storage sale this yr and made $5,750.
They bought outdated garments, outdated childrenâs toys, used furnishings, and different used
family items.
Luke obtained a
$25,000 present from his mother and father in the course of the yr.
Throughout 2015, Luke had the next inventory
gross sales:
Date
Bought
Foundation
Date
Bought
Quantity
Realized
Amazon.com
11/1/2014
$12,959
10/23/2015
$17,770
Barnes & Noble
7/14/2007
$18,665
three/11/2015
$10,155
Pepsico
5/6/1996
$6,263
9/19/2015
$6,541
Ford
four/12/2015
$12,540
7/10/2015
$10,540
NAME
______________________________________
ACC 5170
Tax Return Project 1
Winter 2016
COVER
SHEET
ISSUE
TREATMENT
REASON
Submitting
standing
Married
submitting collectively
married
at yr finish
Variety of dependents claimed
