1. Beth R. Jordan lives at 2322 Skyview Road, Mesa, AZ 85201. Beth's birthday is July 4, 1972, and her Social Security number is 123-45-6785. Beth is single and has no dependents. Beth had health coverage for the entire year 2. Beth wants to contribute $3 to the Presidential Election Campaign Fund 3. Beth is a tax accountant with Mesa Manufacturing Company, 1203 Westerm Avenue, Mesa, AZ 85201 (EIN 11-1111 111). In addition to her job at Mesa, she writes computer software programs for tax practitioners and has a part-time tax practice. For 2018, Beth's Fom W-2 from Mesa Manufacturing reports the following items: Line Description Amount 1 Wages, tips, other compensation $65,000.00 10,500.00 2 Federal income tax withheld Social Security wages 65,000.00 Social Security tax withheld 4,030.00 and tips 5 Medicare 65,000.00 wages 942.50 6 Medicare tax withheld. 15 State Arizona 16 State wages, tips, etc. 65,000.00 17 State income tax withheld 1,954.00 During the year, Beth received interest of $1,300 from Arizona Federal Savings and Loan and $400 from Arizona State Bank. Each financial institution reported the interest income on a Form 1099-INT. She received qualified dividends of $800 from Blue Corporation, $750 from Green Corporation, and $650 from Orange Corporation. Each corporation reported Beth's dividend payments on a Form 1099-DIV. (Note: qualified dividends are eligible for the long-term capital gains rate, see textbook page 4-15) 4. 5. Beth received a $1,100 income tax refind from the state of Arizona on April 29, 2018. On her 2017 Federal income tax retum, she reported total itemized deductions of $8,200, which included $2,200 of state income tax withheld by her employer Fees eamed from her part-time tax practice in 2018 totaled $3,800. She paid $600 in processing costs to have the tax retums processed by a computerized tax retum service. 6. On February 8, 2018, Beth bought 500 shares of Gray Corporation common stock for $17.60 a share. On September 12, 2018, she sold the stock for $14 a share. 7. 8. Beth bought a used sports utility vehicle for $6,000 on June 5, 2018. She purchased the vehicle from her brother-in-law, who was unemployed and was in need of cash. On November 2, 2018, she sold the vehicle to a friend for $6,500 9 On January 2, 2018, Beth acquired 100 shares of Blue Corporation common stock for $30 a share. She sold the stock on December 19, 2018, for $55 a share. 10. During the year, Beth records revenues of $16,000 from the sale of a software program she developed. She incured the following expenditures in connection with her software development business. Cost of computer Cost of printer $7,000 2,000 3,000 650 Fumiture Supplies Fee paid to computer consultant 3,500 Beth elected to expense the maximum portion of the cost of the computer, printer, and fumiture allowed under the provisions of 179. These items were placed in service on January 15, 2018, and used 100% in her business 11. Although Mesa suggested that Beth attend a convention on current developments in corporate taxation, Beth was not reimbursed for the travel expenses of $1,420 she incurred in attending. The $1,420 included $200 for meals. 12. During the year, Beth paid $300 for prescription medicines and $2,875 for medical bills Medical insurance premiums were paid for her by her employer 13. Beth paid real property taxes of $1,766 on her home. 14. Interest on her home mortgage (Valley National Bank) was $3,845, and interest to credit card companies was $320 15. Beth contributed $2,080 to various qualifying charities during the year 16. Professional dues and subscriptions totaled $350. 17. Beth paid estimated Federal income taxes of $1,000 18. Beth does not want to file electronically. 19. Check figures to help you when preparing the retum: Taxable income (line 10) Tax overpaid (line 19) $61,467 1,759 Complete the Beth R. Jordan's Federal income tax retum for 2018. In preparing the retum, you will need to use Form 1040 (Schedules 1, 4, and 5) SCHEDULE 1 OMB No. 1545-0074 Additional Income and Adjustments to Income (Form 1040) 2018 Attach to Form 1040. Department of the Treasury Intemal Revenue Service Attachment Sequence Na. 01 Go to www.irs.gov/Form 1040 for instructions and the latest information Names) shown on Form 1040 Your social security number 1-9b Additional 1-9b Reserved 10 Taxable refunds, credits, or offsets of state and local income taxes 10 Income Alimony received Business income or (loss). Attach Schedule C or C-EZ Capital gain or (loss). Attach Schedule D if required. If not required, check here Other gains or (losses). Attach Form 4797 11 11 12 12 13 13 14 14 15b 15a Reserved 16a Reserved 16b 17 Rental real estate, royalties, partnerships, S corporations, trusts, etc. Attach Schedule E Farm income or (loss). Attach Schedule F Unemployment compensation 17 18 18 19 19 20b 20a Reserved 21 Other income. List type and amount 21 22 Combine the amounts in the far right column. If you don't have any adjustments to income, enter here and include on Form 1040, line 6. Otherwise, go to line 23 . Educator expenses 22 Adjustments 23 23 24 Certain business expenses of reservists, performing artists, and fee-basis government officials. Attach Form 2106 Health savings account deduction. Attach Form 8889 to Income 24 25 25 Moving expenses for members of the Amed Forces. Attach Form 3903 26 26 Deductible part of self-employment tax. Attach Schedule SE Self-employed SEP, SIMPLE, and qualified plans Self-employed health insurance deduction Penalty on early withdrawal of savings 31a Alimony paid IRA deduction 27 27 28 28 29 29 30 30 b Recipient's SSN 31a 32 32 33 Student loan interest deduction 33 34 Reserved 34 35 Reserved 35 Add lines 23 through 35 36 36 For Paperwork Reduction Act Notice, see your tax return instructions. Schedule 1 (Form 1040) 2018. Cat. No. 71479F SCHEDULE 4 OMB No. 1545-0074 Other Taxes (Form 1040) 2018 Attach to Form 1040. Department of the Treasury Intemal Revenue Service Attachment Go to www.irs.gov/Form 1040 for instructions and the latest information. Sequence No. 04 Name(s) shown on Form 1040 Your social security number Other Self-employment tax. Attach Schedule SE 57 57 Unreported social security and Medicare tax from: Form a4137 b 58 8919 58 Taxes 59 Additional tax on IRAS, other qualified retirement plans, and other tax-favored accounts. Attach Form 5329 if required Household employment taxes. Attach Schedule H 59 60a 60a b Repayment of first-time homebuyer credit from Form 5405. Attach Form 5405 if required 60b 61 Health care: individual responsibility (see instructions) 61 62 Taxes from: a Form 8959 b Form 8960 c Instructions; enter code(s) Section 965 net tax liability installment from Form 965-A 62 63 63 64 Add the amounts in the far right column. These are your total other taxes. Enter here and on Form 1040, line 14 64 For Paperwork Reduction Act Notice, see your tax return instructions. Schedule 4 (Form 1040) 2018 Cat. No. 71481R SCHEDULE 5 (Form 1040) OMB No. 1545-0074 Other Payments and Refundable Credits 2018 Attach to Form 1040. Attachment Department of the Treasury Internal Revenue Service Go to www.irs.gov/Form 1040 for instructions and the latest information. Sequence No. 05 Name(s) shown on Form 1040 Your social security number Other Reserved 65 65 66 2018 estimated tax payments and amount applied from 2017 return 66 Payments and Refundable 68-69 Reserved 67a Reserved 67a Reserved 67b 68-69 Credits Net premium tax credit. Attach Form 8962 Amount paid with request for extension to file (see instructions) Excess social security and tier 1 RRTA tax withheld Credit for federal tax on fuels. Attach Form 4136 Credits from Form: a2439 b Add the amounts in the far right column. These are your total other payments and refundable credits. Enter here and include on Form 1040, line 17. 70 70 71 71 72 72 73 73 | Reserved 74 8885 d 74 75 75 For Paperwork Reduction Act Notice, see your tax return instructions. Schedule 5 (Form 1040) 2018 Cat. No. 71482C 1. Beth R. Jordan lives at 2322 Skyview Road, Mesa, AZ 85201. Beth's birthday is July 4, 1972, and her Social Security number is 123-45-6785. Beth is single and has no dependents. Beth had health coverage for the entire year 2. Beth wants to contribute $3 to the Presidential Election Campaign Fund 3. Beth is a tax accountant with Mesa Manufacturing Company, 1203 Westerm Avenue, Mesa, AZ 85201 (EIN 11-1111 111). In addition to her job at Mesa, she writes computer software programs for tax practitioners and has a part-time tax practice. For 2018, Beth's Fom W-2 from Mesa Manufacturing reports the following items: Line Description Amount 1 Wages, tips, other compensation $65,000.00 10,500.00 2 Federal income tax withheld Social Security wages 65,000.00 Social Security tax withheld 4,030.00 and tips 5 Medicare 65,000.00 wages 942.50 6 Medicare tax withheld. 15 State Arizona 16 State wages, tips, etc. 65,000.00 17 State income tax withheld 1,954.00 During the year, Beth received interest of $1,300 from Arizona Federal Savings and Loan and $400 from Arizona State Bank. Each financial institution reported the interest income on a Form 1099-INT. She received qualified dividends of $800 from Blue Corporation, $750 from Green Corporation, and $650 from Orange Corporation. Each corporation reported Beth's dividend payments on a Form 1099-DIV. (Note: qualified dividends are eligible for the long-term capital gains rate, see textbook page 4-15) 4. 5. Beth received a $1,100 income tax refind from the state of Arizona on April 29, 2018. On her 2017 Federal income tax retum, she reported total itemized deductions of $8,200, which included $2,200 of state income tax withheld by her employer Fees eamed from her part-time tax practice in 2018 totaled $3,800. She paid $600 in processing costs to have the tax retums processed by a computerized tax retum service. 6. On February 8, 2018, Beth bought 500 shares of Gray Corporation common stock for $17.60 a share. On September 12, 2018, she sold the stock for $14 a share. 7. 8. Beth bought a used sports utility vehicle for $6,000 on June 5, 2018. She purchased the vehicle from her brother-in-law, who was unemployed and was in need of cash. On November 2, 2018, she sold the vehicle to a friend for $6,500 9 On January 2, 2018, Beth acquired 100 shares of Blue Corporation common stock for $30 a share. She sold the stock on December 19, 2018, for $55 a share. 10. During the year, Beth records revenues of $16,000 from the sale of a software program she developed. She incured the following expenditures in connection with her software development business. Cost of computer Cost of printer $7,000 2,000 3,000 650 Fumiture Supplies Fee paid to computer consultant 3,500 Beth elected to expense the maximum portion of the cost of the computer, printer, and fumiture allowed under the provisions of 179. These items were placed in service on January 15, 2018, and used 100% in her business 11. Although Mesa suggested that Beth attend a convention on current developments in corporate taxation, Beth was not reimbursed for the travel expenses of $1,420 she incurred in attending. The $1,420 included $200 for meals. 12. During the year, Beth paid $300 for prescription medicines and $2,875 for medical bills Medical insurance premiums were paid for her by her employer 13. Beth paid real property taxes of $1,766 on her home. 14. Interest on her home mortgage (Valley National Bank) was $3,845, and interest to credit card companies was $320 15. Beth contributed $2,080 to various qualifying charities during the year 16. Professional dues and subscriptions totaled $350. 17. Beth paid estimated Federal income taxes of $1,000 18. Beth does not want to file electronically. 19. Check figures to help you when preparing the retum: Taxable income (line 10) Tax overpaid (line 19) $61,467 1,759 Complete the Beth R. Jordan's Federal income tax retum for 2018. In preparing the retum, you will need to use Form 1040 (Schedules 1, 4, and 5) SCHEDULE 1 OMB No. 1545-0074 Additional Income and Adjustments to Income (Form 1040) 2018 Attach to Form 1040. Department of the Treasury Intemal Revenue Service Attachment Sequence Na. 01 Go to www.irs.gov/Form 1040 for instructions and the latest information Names) shown on Form 1040 Your social security number 1-9b Additional 1-9b Reserved 10 Taxable refunds, credits, or offsets of state and local income taxes 10 Income Alimony received Business income or (loss). Attach Schedule C or C-EZ Capital gain or (loss). Attach Schedule D if required. If not required, check here Other gains or (losses). Attach Form 4797 11 11 12 12 13 13 14 14 15b 15a Reserved 16a Reserved 16b 17 Rental real estate, royalties, partnerships, S corporations, trusts, etc. Attach Schedule E Farm income or (loss). Attach Schedule F Unemployment compensation 17 18 18 19 19 20b 20a Reserved 21 Other income. List type and amount 21 22 Combine the amounts in the far right column. If you don't have any adjustments to income, enter here and include on Form 1040, line 6. Otherwise, go to line 23 . Educator expenses 22 Adjustments 23 23 24 Certain business expenses of reservists, performing artists, and fee-basis government officials. Attach Form 2106 Health savings account deduction. Attach Form 8889 to Income 24 25 25 Moving expenses for members of the Amed Forces. Attach Form 3903 26 26 Deductible part of self-employment tax. Attach Schedule SE Self-employed SEP, SIMPLE, and qualified plans Self-employed health insurance deduction Penalty on early withdrawal of savings 31a Alimony paid IRA deduction 27 27 28 28 29 29 30 30 b Recipient's SSN 31a 32 32 33 Student loan interest deduction 33 34 Reserved 34 35 Reserved 35 Add lines 23 through 35 36 36 For Paperwork Reduction Act Notice, see your tax return instructions. Schedule 1 (Form 1040) 2018. Cat. No. 71479F SCHEDULE 4 OMB No. 1545-0074 Other Taxes (Form 1040) 2018 Attach to Form 1040. Department of the Treasury Intemal Revenue Service Attachment Go to www.irs.gov/Form 1040 for instructions and the latest information. Sequence No. 04 Name(s) shown on Form 1040 Your social security number Other Self-employment tax. Attach Schedule SE 57 57 Unreported social security and Medicare tax from: Form a4137 b 58 8919 58 Taxes 59 Additional tax on IRAS, other qualified retirement plans, and other tax-favored accounts. Attach Form 5329 if required Household employment taxes. Attach Schedule H 59 60a 60a b Repayment of first-time homebuyer credit from Form 5405. Attach Form 5405 if required 60b 61 Health care: individual responsibility (see instructions) 61 62 Taxes from: a Form 8959 b Form 8960 c Instructions; enter code(s) Section 965 net tax liability installment from Form 965-A 62 63 63 64 Add the amounts in the far right column. These are your total other taxes. Enter here and on Form 1040, line 14 64 For Paperwork Reduction Act Notice, see your tax return instructions. Schedule 4 (Form 1040) 2018 Cat. No. 71481R SCHEDULE 5 (Form 1040) OMB No. 1545-0074 Other Payments and Refundable Credits 2018 Attach to Form 1040. Attachment Department of the Treasury Internal Revenue Service Go to www.irs.gov/Form 1040 for instructions and the latest information. Sequence No. 05 Name(s) shown on Form 1040 Your social security number Other Reserved 65 65 66 2018 estimated tax payments and amount applied from 2017 return 66 Payments and Refundable 68-69 Reserved 67a Reserved 67a Reserved 67b 68-69 Credits Net premium tax credit. Attach Form 8962 Amount paid with request for extension to file (see instructions) Excess social security and tier 1 RRTA tax withheld Credit for federal tax on fuels. Attach Form 4136 Credits from Form: a2439 b Add the amounts in the far right column. These are your total other payments and refundable credits. Enter here and include on Form 1040, line 17. 70 70 71 71 72 72 73 73 | Reserved 74 8885 d 74 75 75 For Paperwork Reduction Act Notice, see your tax return instructions. Schedule 5 (Form 1040) 2018 Cat. No. 71482C