5-16 Essentials of Federal Income Taxation CUMULATIVE PROBLEM (CHAPTERS 1-6) problem is suitable for manual preparation or computer software application. Use Form 1040, Schedule A, and Form 2441. All parties sign and date the return on April 1, 2019. This Use the following information to prepare the joint income tax return of Frank and Sandra Anderson Frank A. (SSN 811-26-3717) and Sandra K. (SSN 820-47-9231) Anderson (ages 48 and 51, respectively) reside at 2121 Century Avenue, Middleton, CA 92657, with their three children whom they fully support: Mandy (age 9, SSN 998-21-5246), Charles (age 11, SSN 998-21. 5247), and Carol (age 14, SSN 998-21-1827). The Andersons file a joint return, and neither clects to have $3 go to the Presidential election campaign fund. Frank is employed as a customer service representative. Sandra is employed a computer operator. Details of their salaries and withholdings, are as follows: Federal Social Gross State Income Income Tax Security Tax Wages Tax Withheld Withheld Withheld $66,500 $4,792 $6,700 $4,123 Sandra 40,343 3,087 2.980 2,501 as a Medicare Tax Withheld $964 Frank 585 Frank's employer provides him with full family health care coverage as a tax-free employee benefit. Part of Frank's compensation package also includes group-term life insurance equal to 75% of his annual salary. The cost to the company for the premium was $240. In August, Sandra earned $400 of interest when she cashed in a certificate of deposit from State Bank. The Middleton Farmers Bank credited $300 of interest to the Andersons' joint savings account during the year. The Andersons overpaid their 2018 state income taxes by $142. They received their refund in June. The Andersons' itemized deductions exceeded the standard deduction by $2,300 last year. Since they both work outside the home, they are unable to be there when their children return home from school. This year the Andersons paid a neighbor, Gloria Dryden (SSN 992-31-4270), $4,100 to care for Mandy and Charles in her home after school hours and during the summer vacation period while the Andersons were at work. Gloria's address is 2132 Century Avenue, Middleton, CA 92657 During the year, Sandra received unemployment compensation of $6,000. Frank is covered by a qualified pension plan at work; Sandra is not. The Andersons are interested in contributing to their respective traditional IRAs the maximum that they can deduct on their 2019 tax return. Both contributions take place before April 15, 2020. Deductions S SIR 175 168 1,200 459 Cancelled checks, receipts, and paid bills support the following expenditures Odo T. Miller, M.D. (not covered by insurance) Qualified stop smoking program for Sandra Alex B. Kramer, D.V.M. (treatment of Fritz, the Andersons' dog) Life insurance premiums on Frank's life (Sandra is the beneficiary) Kathryn R. Smith, dentist (not covered by insurance) Weight loss program for Frank (cosmetic purposes) Martin R. Jones, optometrist (not covered by insurance) Eyeglasses for Mandy (not covered by insurance) Driver's license renewal for Sandra Fishing license for Frank Credit card interest Home mortgage interest on the main home Real estate taxes on the main home Trash pickup fees Home repairs and improvements Homeowner's insurance General sales taxes paid during the year State excise taxes Cash gift to First Unity Church (with receipt) 180 50 175 32 12 275 15.690 6,851 120 620 500 2,572 98 2,200 300 50 260 67 875 Value of Frank's time volunteered to the Girl Scouts Political contributions Bingo and lottery tickets Rental for safe deposit box to store investment items Legal fees paid for preparation of the Andersons' personal wills In addition, on April 24, 2019, the Andersons paid $600 to Homer P. Gill for preparation of their 2018 tax return. When Frank's father died on Christmas Day, Frank inherited his father's savings account. The account balance was $20,000. In March, Sandra's best friend, Nancy, moved to Sweden. Nancy's 17-year-old daughter, Inga, stayed with the Andersons for the rest of the year. Inga had a part-time job after school and earned $4,120. The Andersons provided over half of Inga's support. 5-16 Essentials of Federal Income Taxation CUMULATIVE PROBLEM (CHAPTERS 1-6) problem is suitable for manual preparation or computer software application. Use Form 1040, Schedule A, and Form 2441. All parties sign and date the return on April 1, 2019. This Use the following information to prepare the joint income tax return of Frank and Sandra Anderson Frank A. (SSN 811-26-3717) and Sandra K. (SSN 820-47-9231) Anderson (ages 48 and 51, respectively) reside at 2121 Century Avenue, Middleton, CA 92657, with their three children whom they fully support: Mandy (age 9, SSN 998-21-5246), Charles (age 11, SSN 998-21. 5247), and Carol (age 14, SSN 998-21-1827). The Andersons file a joint return, and neither clects to have $3 go to the Presidential election campaign fund. Frank is employed as a customer service representative. Sandra is employed a computer operator. Details of their salaries and withholdings, are as follows: Federal Social Gross State Income Income Tax Security Tax Wages Tax Withheld Withheld Withheld $66,500 $4,792 $6,700 $4,123 Sandra 40,343 3,087 2.980 2,501 as a Medicare Tax Withheld $964 Frank 585 Frank's employer provides him with full family health care coverage as a tax-free employee benefit. Part of Frank's compensation package also includes group-term life insurance equal to 75% of his annual salary. The cost to the company for the premium was $240. In August, Sandra earned $400 of interest when she cashed in a certificate of deposit from State Bank. The Middleton Farmers Bank credited $300 of interest to the Andersons' joint savings account during the year. The Andersons overpaid their 2018 state income taxes by $142. They received their refund in June. The Andersons' itemized deductions exceeded the standard deduction by $2,300 last year. Since they both work outside the home, they are unable to be there when their children return home from school. This year the Andersons paid a neighbor, Gloria Dryden (SSN 992-31-4270), $4,100 to care for Mandy and Charles in her home after school hours and during the summer vacation period while the Andersons were at work. Gloria's address is 2132 Century Avenue, Middleton, CA 92657 During the year, Sandra received unemployment compensation of $6,000. Frank is covered by a qualified pension plan at work; Sandra is not. The Andersons are interested in contributing to their respective traditional IRAs the maximum that they can deduct on their 2019 tax return. Both contributions take place before April 15, 2020. Deductions S SIR 175 168 1,200 459 Cancelled checks, receipts, and paid bills support the following expenditures Odo T. Miller, M.D. (not covered by insurance) Qualified stop smoking program for Sandra Alex B. Kramer, D.V.M. (treatment of Fritz, the Andersons' dog) Life insurance premiums on Frank's life (Sandra is the beneficiary) Kathryn R. Smith, dentist (not covered by insurance) Weight loss program for Frank (cosmetic purposes) Martin R. Jones, optometrist (not covered by insurance) Eyeglasses for Mandy (not covered by insurance) Driver's license renewal for Sandra Fishing license for Frank Credit card interest Home mortgage interest on the main home Real estate taxes on the main home Trash pickup fees Home repairs and improvements Homeowner's insurance General sales taxes paid during the year State excise taxes Cash gift to First Unity Church (with receipt) 180 50 175 32 12 275 15.690 6,851 120 620 500 2,572 98 2,200 300 50 260 67 875 Value of Frank's time volunteered to the Girl Scouts Political contributions Bingo and lottery tickets Rental for safe deposit box to store investment items Legal fees paid for preparation of the Andersons' personal wills In addition, on April 24, 2019, the Andersons paid $600 to Homer P. Gill for preparation of their 2018 tax return. When Frank's father died on Christmas Day, Frank inherited his father's savings account. The account balance was $20,000. In March, Sandra's best friend, Nancy, moved to Sweden. Nancy's 17-year-old daughter, Inga, stayed with the Andersons for the rest of the year. Inga had a part-time job after school and earned $4,120. The Andersons provided over half of Inga's support