22 . What is the amount of taxable interest reported on the Matthews Form 1040? a . $50 b . $250 c . $300 d . $350

Advanced Scenario 7: Mark and Barbara Matthews Directions

Using the tax software, complete the tax return, including Form 1040 and all appropri- ate forms, schedules, or worksheets . Answer the questions following the scenario .

Note: When entering Social Security numbers (SSNs) or Employer Identification Numbers (EINs), replace the Xs as directed, or with any four digits of your choice.

Interview Notes

• Mark and Barbara are married and want to file a joint return.

• Mark retired and began receiving retirement income on March 1, 2017 . No distribu- tions were received prior to his retirement . Mark selected a joint survivor annuity for these payments . The plan cost at annuity start date was $14,500 . Mark has already recovered $1,029 of his cost in the plan .

• The Matthews received a $125 state income tax refund from their 2018 state tax return . The Matthews do not have enough deductions to itemize for 2019 and they have never itemized deductions .

• Mark and Barbara stated if they are entitled to a refund, they want half of it depos- ited into their checking account and the other half deposited into their savings account . The checking account number is 123456789 and the savings account number is 987654321 . Both accounts are from Adelphi Bank and Trust .

a Employee's social security number 310-00-XXXX b Employer identification number (EIN) 40-000XXXX c Employer's name, address, and ZIP code 2 Safe, accurate, OMB No. 1545-0008 we 1 Wages, tips, other compensation 28.500.00 3 Social security wages 28,500.00 5 Medicare wages and tips 28,500.00 7 Social Security tips Visit the IRS website at file www.irs.goviefile Federal income tax withheld 2,784.00 4 Social Security tax withheld 1,767.00 6 Medicare tax withheld 413.25 8 Allocated tips CONWAY COMPANY 25 IMPERIAL LANE YOUR CITY, STATE ZIP d Control number 10 Dependent care benefits e Employee's first name and initial Last name Suft. 11 Nonqualified plans 12a See instructions for box 12 13 or BARBARA MATTHEWS 742 RED ROOSTER YOUR CITY, STATE ZIP 14 Other 1 Employee's address and ZIP code 15 State Employer's state ID number YS 34-500XXXX 16 State wages, tips, etc17 State income tax 18 Local wages, tips, etc. 19 Local income tax 20 Locality name 28,500.00 1,400.00 Department of the Treasury-Intemal Revenue Service 2019 W .9 Wage and Tax Form WV4 Statement Copy B-To Be Filed With Employee's FEDERAL Tax Return This information is being furnished to the Internal Revenue Service. 2019 CORRECTED (if checked) PAYER'S name, street address, city or town, state or province, 1 Gross distribution OMB No. 1545-0119 Distributions From country, ZIP or foreign postal code, and phone no. Pensions, Annuities, $ PINE CORPORATION Retirement or 22,532.00 Profit-Sharing Plans, 1809 GULF DRIVE 2a Taxable amount IRAs, Insurance YOUR CITY, STATE ZIP Contracts, etc. Form 1099-R 2b Taxable amount Total Copy B not determined X distribution Report this PAYER'S TIN RECIPIENT'S TIN 3 Capital gain (included 4 Federal income tax income on your in box 2a) withheld federal tax return. If this 40-100XXXX 317-00-XXXX form shows 2,253.00 federal income RECIPIENT'S name 5 Employee contributions 6 Net unrealized tax withheld in Designated Roth appreciation in contributions or employer's securities box 4, attach MARK MATTHEWS insurance premiums this copy to your return. Street address (including apt. no.) 7 Distribution IRA 8 Other SEPI code(s) ISIMPLE 742 RED ROOSTER This information is D $ being fumished to City or town, state or province, country, and ZIP or foreign postal code 9a Your percentage of total b Total employee contrbutions the IRS YOUR CITY, STATE ZIP distribution %$ 14,500.00 10 Amount allocable to IRR 1 1 1st year of FATCA filing 12 State tax withheld 13 State/Payer's state no. 14 State distribution within 5 years desig. Roth contrib. requirement 9 Account number (see instructions) 15 Local tax withheld 16 Name of locality 17 Local distribution Date of payment Form 1099-R www.lrs.gov/Form1099R Department of the Treasury - Internal Revenue Service CORRECTED (if checked) PAYER'S name, street address, city or town, state or province, 1 Gross distribution OMB No. 1545-0119 Distributions From country, ZIP or foreign postal code, and phone no. Pensions, Annuities, ESSEX BANK, CUSTODIAN Retirement or $ 3,200.00 2019 Profit-Sharing Plans, 2a Taxable amount FOR ROTH IRA OF MARK MATTHEWS IRAs, Insurance 300 MARIN STREET Contracts, etc. 0.00 Form 1099-R YOUR CITY, STATE ZIP 2b Taxable amount Total Copy B not determined D distribution Report this PAYER'S TIN RECIPIENT'S TIN 3 Capital gain (included 4 Federal income tax income on your in box 2a) withheld federal tax return. If this form shows 48-100XXXX 317-00-XXXX federal income RECIPIENT'S name 5 Employee contribution 6 Net unrealized tax withheld in Designated Roth appreciation in box 4, attach contributions or employer's securities MARK MATTHEWS insurance premiums this copy to your return. Street address (including apt. no.) 7 Distribution IRA 8 Other SEPI code(s) I SIMPLE This information is 742 RED ROOSTER X $ being furnished to City or town, state or province, country, and ZIP or foreign postal code 9a Your percentage of total 9b Tots omployee contributions the IRS YOUR CITY, STATE ZIP distribution %$ 10 Amount allocable to IRR 11 1st year of FATCA filing 12 State tax withheld 13 State/Payer's state no. 14 State distribution within 5 years desig, Roth contrib. requirement Account number (see instructions) 15 Local tax withheld 16 Name of locality Date of payment 17 Local distribution Form 1099-R www.lrs.gowForm1099R Department of the Treasury - Internal Revenue Service 2019 PART FORM SSA-1099 - SOCIAL SECURITY BENEFIT STATEMENT On40. PART OF YOUR SOCIAL SECURITY BENEFITS SHOWN IN BOX S MAY BE TAXABLE INCOME SEE THE REVERSE FOR MORE INFORMATION pox 1. Name MARK MATTHEWS Box 2. Beneficiary's Social Security Number 317-00-XXXX Box 3. Benefits Paid in 2019 Box 4. Benefits Repaid to SSA in 2019 Box 5. Net Benefits for 2019 (Box 3 minus Box 4 $17,214.00 $17,214.00 DESCRIPTION OF AMOUNT IN BOX 3 DESCRIPTION OF AMOUNT IN BOX 4 Paid by check or direct deposit: $13,867.00 Medicare Part B premiums deducted from your benefits: $1,626.00 Box 6. Voluntary Federal Income Tax Withholding Total Additions: Benefits for 2019: $17,214 $1,721.00 Box 7. Address 742 Red Rooster Your City, State ZIP Rok Chin Number ) Draft as of June 21, 2019 - Subject to change For SSA-1000-SM 62013) DO NOT RETURN THIS FORM TO SSA OR IRS Your CYSZP Acc N1222 R ON 1100DOOX Pavers Red ON 2000OOK Form 1099-DN 2019 Dividends and Distributions ..220.00 30800 000 5000 000 000 1800 000 1 Total Ordinary Dividends... ... ....... 1 Quad Dividends........ 2a Total Capital Gain Distributions includes 2 20 20 Capa Gansa t Urracaptured 1250 Gain 2 Capa Ganta n t Section 1202 Gain 2d Capital Gains that represent Collectibles (28%) Gain 3 Nondividend Distributions ...... 4 Federal income Tax Withheld. 5 Section 199A Dividends .......... 6 Investment Expenses 7 Foreign Tax Paid...... 8 Foreign country or US. Possession... 9 Cash Liquidation Distributions. 10 Non-Cash Liquidation Distributions...... 11 Exam e s Dividends........ 12 Specified Pevale Activity Bond rest Dividends 13 State 14 State identification No.... 15 Sute Tax wi ld............. Form 1099-MISC 2019 Miscellaneous Income CEB O RENO 545 2 Royale 4 Federal income Tax Withheld.... 8 Substitute Payments in Lieu of Dividends or interest 16 Swe Tax Wild 17 Su Payer's Su No...... 18 Se income Form 1099-INT" 2019 Interest Income 000 000 000 000 000 0.00 000 000 000 000 000 000 000 1 interest income 2 Early Withdrawal Panay 3 interest on US Savings Bonds and Treas. Obligations 4 Federal income Tax Withheld.. 5 Investment Expenses 6 Foreign Tax Pad.. 7 Foreign Country US. Possession.... & Tax E v erest ..... 9 Specified Peate Activity Bonderest 14 Tax Emo Bond USP No............. 000 000 Summary of 2019 Proceeds From Broker and Barter Exchange Transactions Sale Price of Shocks Bondsee.............................................................. 6.300.00 Federne Tax Wid...... 000 Pacto ABC INVESTMENTS 456 Pma Your Cty VS BP 2019 TAX REPORTING STATEMENT Mand Mas 72 Red Rooster Road Your C YSBP ACCUENA 11.222 Rocio ON 17.00 XOOK Payer's Red Number 1 200 OK FORM 1099-8 2019 Proceeds from Broker and Barter Exchange Transactions Short-term transactions for which basis to the RS Report on Form 899 with BoxA checked andor Schedule D. Parti Descono a rybol CUSP (IRS Fom 100 Boubea hobetonbod Chat Idaho Co. Common Stock Sale 001/2015 1001200 250 000 TOTALS 2 49.00 1700 00 1,700.00 189.00 2.189.00 FORM 1099-8 20 19 Proceeds from Broker and Barter Exchange Transactions Long term transactions for which hasis is not reported to the IRS Report on Form with Box Echecked and or Schedule DParti herbal CUSIP Description 1d Stod a AS (IRS Fm 106-boxnumbers are shown below inbolde Scores c wa Co. Connon Stock Sue 1100 ON200 200 000 TOTALS 450000 1700 2 00000 CORRECTED checked Adelphi Bank and Trust 1020 Yonkers Blvd YOUR CITY STATE ZIP 2019 Interest Income $ 300.00 om 1009-INT Copy REGONS For Recipient 34-7XXOOOXX 317-09-XXXX MARK MATTHEWS Song 742 RED ROOSTER action may be sed on your income YOUR CITY, STATE ZIP rest For 1099-INT Sep for your records a Employee's social security number 310-00-XXXX b Employer identification number (EIN) 40-000XXXX c Employer's name, address, and ZIP code 2 Safe, accurate, OMB No. 1545-0008 we 1 Wages, tips, other compensation 28.500.00 3 Social security wages 28,500.00 5 Medicare wages and tips 28,500.00 7 Social Security tips Visit the IRS website at file www.irs.goviefile Federal income tax withheld 2,784.00 4 Social Security tax withheld 1,767.00 6 Medicare tax withheld 413.25 8 Allocated tips CONWAY COMPANY 25 IMPERIAL LANE YOUR CITY, STATE ZIP d Control number 10 Dependent care benefits e Employee's first name and initial Last name Suft. 11 Nonqualified plans 12a See instructions for box 12 13 or BARBARA MATTHEWS 742 RED ROOSTER YOUR CITY, STATE ZIP 14 Other 1 Employee's address and ZIP code 15 State Employer's state ID number YS 34-500XXXX 16 State wages, tips, etc17 State income tax 18 Local wages, tips, etc. 19 Local income tax 20 Locality name 28,500.00 1,400.00 Department of the Treasury-Intemal Revenue Service 2019 W .9 Wage and Tax Form WV4 Statement Copy B-To Be Filed With Employee's FEDERAL Tax Return This information is being furnished to the Internal Revenue Service. 2019 CORRECTED (if checked) PAYER'S name, street address, city or town, state or province, 1 Gross distribution OMB No. 1545-0119 Distributions From country, ZIP or foreign postal code, and phone no. Pensions, Annuities, $ PINE CORPORATION Retirement or 22,532.00 Profit-Sharing Plans, 1809 GULF DRIVE 2a Taxable amount IRAs, Insurance YOUR CITY, STATE ZIP Contracts, etc. Form 1099-R 2b Taxable amount Total Copy B not determined X distribution Report this PAYER'S TIN RECIPIENT'S TIN 3 Capital gain (included 4 Federal income tax income on your in box 2a) withheld federal tax return. If this 40-100XXXX 317-00-XXXX form shows 2,253.00 federal income RECIPIENT'S name 5 Employee contributions 6 Net unrealized tax withheld in Designated Roth appreciation in contributions or employer's securities box 4, attach MARK MATTHEWS insurance premiums this copy to your return. Street address (including apt. no.) 7 Distribution IRA 8 Other SEPI code(s) ISIMPLE 742 RED ROOSTER This information is D $ being fumished to City or town, state or province, country, and ZIP or foreign postal code 9a Your percentage of total b Total employee contrbutions the IRS YOUR CITY, STATE ZIP distribution %$ 14,500.00 10 Amount allocable to IRR 1 1 1st year of FATCA filing 12 State tax withheld 13 State/Payer's state no. 14 State distribution within 5 years desig. Roth contrib. requirement 9 Account number (see instructions) 15 Local tax withheld 16 Name of locality 17 Local distribution Date of payment Form 1099-R www.lrs.gov/Form1099R Department of the Treasury - Internal Revenue Service CORRECTED (if checked) PAYER'S name, street address, city or town, state or province, 1 Gross distribution OMB No. 1545-0119 Distributions From country, ZIP or foreign postal code, and phone no. Pensions, Annuities, ESSEX BANK, CUSTODIAN Retirement or $ 3,200.00 2019 Profit-Sharing Plans, 2a Taxable amount FOR ROTH IRA OF MARK MATTHEWS IRAs, Insurance 300 MARIN STREET Contracts, etc. 0.00 Form 1099-R YOUR CITY, STATE ZIP 2b Taxable amount Total Copy B not determined D distribution Report this PAYER'S TIN RECIPIENT'S TIN 3 Capital gain (included 4 Federal income tax income on your in box 2a) withheld federal tax return. If this form shows 48-100XXXX 317-00-XXXX federal income RECIPIENT'S name 5 Employee contribution 6 Net unrealized tax withheld in Designated Roth appreciation in box 4, attach contributions or employer's securities MARK MATTHEWS insurance premiums this copy to your return. Street address (including apt. no.) 7 Distribution IRA 8 Other SEPI code(s) I SIMPLE This information is 742 RED ROOSTER X $ being furnished to City or town, state or province, country, and ZIP or foreign postal code 9a Your percentage of total 9b Tots omployee contributions the IRS YOUR CITY, STATE ZIP distribution %$ 10 Amount allocable to IRR 11 1st year of FATCA filing 12 State tax withheld 13 State/Payer's state no. 14 State distribution within 5 years desig, Roth contrib. requirement Account number (see instructions) 15 Local tax withheld 16 Name of locality Date of payment 17 Local distribution Form 1099-R www.lrs.gowForm1099R Department of the Treasury - Internal Revenue Service 2019 PART FORM SSA-1099 - SOCIAL SECURITY BENEFIT STATEMENT On40. PART OF YOUR SOCIAL SECURITY BENEFITS SHOWN IN BOX S MAY BE TAXABLE INCOME SEE THE REVERSE FOR MORE INFORMATION pox 1. Name MARK MATTHEWS Box 2. Beneficiary's Social Security Number 317-00-XXXX Box 3. Benefits Paid in 2019 Box 4. Benefits Repaid to SSA in 2019 Box 5. Net Benefits for 2019 (Box 3 minus Box 4 $17,214.00 $17,214.00 DESCRIPTION OF AMOUNT IN BOX 3 DESCRIPTION OF AMOUNT IN BOX 4 Paid by check or direct deposit: $13,867.00 Medicare Part B premiums deducted from your benefits: $1,626.00 Box 6. Voluntary Federal Income Tax Withholding Total Additions: Benefits for 2019: $17,214 $1,721.00 Box 7. Address 742 Red Rooster Your City, State ZIP Rok Chin Number ) Draft as of June 21, 2019 - Subject to change For SSA-1000-SM 62013) DO NOT RETURN THIS FORM TO SSA OR IRS Your CYSZP Acc N1222 R ON 1100DOOX Pavers Red ON 2000OOK Form 1099-DN 2019 Dividends and Distributions ..220.00 30800 000 5000 000 000 1800 000 1 Total Ordinary Dividends... ... ....... 1 Quad Dividends........ 2a Total Capital Gain Distributions includes 2 20 20 Capa Gansa t Urracaptured 1250 Gain 2 Capa Ganta n t Section 1202 Gain 2d Capital Gains that represent Collectibles (28%) Gain 3 Nondividend Distributions ...... 4 Federal income Tax Withheld. 5 Section 199A Dividends .......... 6 Investment Expenses 7 Foreign Tax Paid...... 8 Foreign country or US. Possession... 9 Cash Liquidation Distributions. 10 Non-Cash Liquidation Distributions...... 11 Exam e s Dividends........ 12 Specified Pevale Activity Bond rest Dividends 13 State 14 State identification No.... 15 Sute Tax wi ld............. Form 1099-MISC 2019 Miscellaneous Income CEB O RENO 545 2 Royale 4 Federal income Tax Withheld.... 8 Substitute Payments in Lieu of Dividends or interest 16 Swe Tax Wild 17 Su Payer's Su No...... 18 Se income Form 1099-INT" 2019 Interest Income 000 000 000 000 000 0.00 000 000 000 000 000 000 000 1 interest income 2 Early Withdrawal Panay 3 interest on US Savings Bonds and Treas. Obligations 4 Federal income Tax Withheld.. 5 Investment Expenses 6 Foreign Tax Pad.. 7 Foreign Country US. Possession.... & Tax E v erest ..... 9 Specified Peate Activity Bonderest 14 Tax Emo Bond USP No............. 000 000 Summary of 2019 Proceeds From Broker and Barter Exchange Transactions Sale Price of Shocks Bondsee.............................................................. 6.300.00 Federne Tax Wid...... 000 Pacto ABC INVESTMENTS 456 Pma Your Cty VS BP 2019 TAX REPORTING STATEMENT Mand Mas 72 Red Rooster Road Your C YSBP ACCUENA 11.222 Rocio ON 17.00 XOOK Payer's Red Number 1 200 OK FORM 1099-8 2019 Proceeds from Broker and Barter Exchange Transactions Short-term transactions for which basis to the RS Report on Form 899 with BoxA checked andor Schedule D. Parti Descono a rybol CUSP (IRS Fom 100 Boubea hobetonbod Chat Idaho Co. Common Stock Sale 001/2015 1001200 250 000 TOTALS 2 49.00 1700 00 1,700.00 189.00 2.189.00 FORM 1099-8 20 19 Proceeds from Broker and Barter Exchange Transactions Long term transactions for which hasis is not reported to the IRS Report on Form with Box Echecked and or Schedule DParti herbal CUSIP Description 1d Stod a AS (IRS Fm 106-boxnumbers are shown below inbolde Scores c wa Co. Connon Stock Sue 1100 ON200 200 000 TOTALS 450000 1700 2 00000 CORRECTED checked Adelphi Bank and Trust 1020 Yonkers Blvd YOUR CITY STATE ZIP 2019 Interest Income $ 300.00 om 1009-INT Copy REGONS For Recipient 34-7XXOOOXX 317-09-XXXX MARK MATTHEWS Song 742 RED ROOSTER action may be sed on your income YOUR CITY, STATE ZIP rest For 1099-INT Sep for your records