Advanced Scenario 8: Cynthia Simon 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 (EIN), replace the Xs as directed, or with any four digits of your choice Interview Notes . Cynthia is an electrician, age 29, and single. Cynthia has investment income and has a consolidated broker's statement Cynthia began a cleaning service business in 2020. She was paid on Form 1099- NEC for 2021. She also received additional cash receipts of $400 not reported on the Form 1099-NEC Cynthia uses the cash method of accounting. She uses business code 561720. Cynthia has receipts for the following expenses: $350 for cleaning supplies $225 for business cards -$450 for a mop, broom, and vacuum cleaner . $150 for work gloves $125 for lunches - $175 for work clothes suitable for everyday use Cynthia has a detailed mileage log reporting for 2021: Mileage from her home to her first client's home and mileage from her last client's home to her home-750 miles In addition, on the days Cynthia worked for multiple clients, she kept track of the mileage from the first client's home to the second client's home in case that mileage was also deductible. She logged 450 miles (not included in the 750 miles). The total mileage on her car for tax year 2021 was 11,200 miles. Of that, 10,000 were personal miles. She placed her only vehicle, a pick-up truck, in service on 3/15/2020. Cynthia will take the standard mileage rate Cynthia took an early distribution from her IRA in April to pay off her educational expenses. Cynthia is paying off her student loan from 2018. Cynthia is working towards her Master of Business Administration (MBA) degree. She took a few college courses this year at an accredited college. Advanced Scenarios 91 Cynthia purchased insurance for herself through the marketplace and has a Form A 1095-A. If Cynthia has a refund, she would like it deposited into her checking account. Cynthia received the third Economic Impact Payment (EIP3) in the amount of $1,400 in 2021. 10. bing ev SOCIAL SECURITY AAL SECO 419-00-XXXX Cynthia Simon Cynthia Simon 0812 astolf wolvetn tinyo Form 13614-C (October 2021) You will need: Department of the Treasury-Internal Revenue Service Intake/Interview & Quality Review Sheet Tax Information such as Forms W-2, 1099, 1098, 1095. Social security cards or ITIN letters for all persons on your tax return. Picture ID (such as valid driver's license) for you and your spouse. Please complete pages 1-4 of this form. OMB Number 1545-1964 You are responsible for the information on your return. Please provide complete and accurate information. If you have questions, please ask the IRS-certified volunteer preparer. Volunteers are trained to provide high quality service and uphold the highest ethical standards. To report unethical behavior to the IRS, email us at wi.voltax@irs.gov Part 1-Your Personal Information (If you are filing a joint retum, enter your names in the same order as last year's return) Last name SIMON M.I. MI Last name 1. Your first name CYNTHIA 2. Your spouse's first name. 3. Mailing address 159 ARCHER AVENUE 4. Your Date of Birth 02/24/1992 5. Your job title ELECTRICIAN 7. Your spouse's Date of Birth 8. Your spouse's job title Apt # City YOUR CITY Best contact number YOUR PHONE # Are you a US citizen? Yes No Best contact number Is your spouse a US citizen? No Yes State 10. Can anyone claim you or your spouse as a dependent? 6. Last year, were you b. Totally and permanently disabled Yes No 9. Last year, was your spouse: b. Totally and permanently disabled Yes No Yes X No Unsure 11. Have you, your spouse, or dependents been a victim of tax related identity theft or been issued an Identity Protection PIN? 12. Provide an email address (optional) (this email address will not be used for contacts from the Internal Revenue Service) Part II-Marital Status and Household Information 1. As of December 31, 2021, what Never Married was your marital status? ZIP code YS YOUR ZIP a. Full-time student c. Legally blind Yes No Yes No a. Full-time student Yes No c. Legally blind Yes No Yes No (This includes registered domestic partnerships, civil unions, or other formal relationships under state law) a. If Yes, Did you get married in 2021? Yes No No b. Did you live with your spouse during any part of the last six months of 2021? Yes Date of final decree Married Divorced Legally Separated Widowed Date of separate maintenance decree Year of spouse's death 2. List the names below of *everyone who lived with you last year (other than your spouse) anyone you supported but did not live with you last year If additional space is needed check here and list on page 3 Name (first, last) Do not enter your name or spouse's name below Date of Birth (mm/dd/yy) daughter parent none, el months ved in your home last year Relationship Number of US Resident Single or to you (for Ceen of US Married as Grestol Canada of 12/31/21 or Mexico (SM) Full-time Totally and Student Permanently last year Disabled (yeah) (yesho Did s Did the person provide last year. Gresie (a) (C) (d) Deshe 05 To be completed by a Certified Volunteer Preparer this person a qualifying childelative core than of any other 50% of his person? her own support Did the taxpayers) provide more than $4.300 than 50% of of income? support for Oval this person? Did the taxpayers) pay more than half the ost of home for this Greabaival penont Catalog Number 52121E www.irs.gov Form 13614-C (Rev 10-2021) Check appropriate box for each question in each section Yes No Unsure Part : -Income-Last Year, Did You (or Your Spouse) Receive 1. (B) Wages or Salary? (Form W-2) If yes, how many jobs did you have last year? 2. (A) Tip Income? 3. (B) Scholarships? (Forms W-2, 1098-T) 5. (B) Refund of state local income taxes? (Form 1099-G) 4. (B) Interest Dividends from checking'savings accounts, bonds, CDs, brokerage? (Forms 1099-INT, 1099-DIV) 6. (B) Alimony income or separate maintenance payments? 7. (A) Self-Employment income? (Form 1099-MISC, 1099-NEC, cash, virtual currency, or other property or services) 8. (A) Cashicheck/virtual currency payments, or other property or services for any work performed not reported on Forms W-2 or 10997 Page 2 9. (A) Income (or loss) from the sale or exchange of Stocks, Bonds, Virtual Currency or Real Estate? (including your home) (Forms 1099-5,1099-8) 10. (B) Disability income? (such as payments from insurance, or workers compensation) (Forms 1099-R, W-2) 11. (A) Retirement income or payments from Pensions. Annuities, and or IRA? (Form 1099-R) D 12. (B) Unemployment Compensation? (Form 1099G) 13. (B) Social Security or Railroad Retirement Benefits? (Forms SSA-1099, RRB-1099) 14. (M) Income (or loss) from Rental Property? 15. (B) Other income? (gambling, lottery, prizes, awards, jury duty, virtual currency, Sch K-1, royalties, foreign income, etc.) Yes No Unsure Part IV-Expenses - Last Year, Did You (or Your Spouse) Pay D 1. (B) Alimony or separate maintenance payments? If yes, do you have the recipient's SSN? 2. Contributions or repayments to a retirement account? IRA (A) 401K (B) 3. (B) College or post secondary educational expenses for yourself, spouse or dependents? (Form 4. Any of the following? (A) Medical & Dental (including insurance premiums) (A) Taxes (State, Real Estate, Personal Property, Sales) 5. (8) Child or dependent care expenses such as daycare? 6. (B) For supplies used as an eligible educator such as a teacher, teacher's aide, counselor, etc.? 7. (A) Expenses related to self-employment income or any other income you received? 8 (8) Student loan interest? (Form 1098-E) Yes No Unsure Part V-Life Events - Last Year, Did You (or Your Spouse) D 1. (A) Have a Health Savings Account? (Forms 5498-SA, 1099-SA, W-2 with code W in box 12) Yes No Roth IRA (B) 1098-T) Other (A) Mortgage Interest (Form 1098) (B) Charitable Contributions 2 (A) Have credit card, student loan or mortgage debt cancelled/forgiven by a lender or have a home foreclosure? (Forms 1099-C, 1099-A) 3. (A) Adopt a child? 4. (B) Have Eamed Income Credit. Child Tax Credit or American Opportunity Credit disallowed in a prior year? If yes, for which tax year? 5. (A) Purchase and install energy-efficient home items? (such as windows, furnace, insulation, etc.) 6 (A) Receive the First Time Homebuyers Credit in 2008? 7. (B) Make estimated tax payments or apply last year's refund to this year's tax? If so how much? 8. (A) File a federal return last year containing a "capital loss carryover on Form 1040 Schedule D? 9. (A) Have health coverage through the Marketplace (Exchange)? (Provide Form 1095-A) 10. (B) Receive an Economic Impact Payment (stimulus) in 20217 D 11. (B) Receive Advanced Child Tax Credit payments?o Form 13614-C v 10-20213 94 Advanced Scenarios Catalog Number 2121E Additional Information and Questions Related to the Preparation of Your Return 1. Would you like to receive written communications from the IRS in a language other than English? Yes No If yes, which language? 2. Presidential Election Campaign Fund (If you check a box, your tax or refund will not change) Check here if you, or your spouse if filing jointly, want $3 to go to this fund 3. If you are due a refund, would you like: a. Direct deposit Yes You Page 3 Spouse b. To purchase US Savings Bonds Yes No Yes To split your refund between different accounts Yes No No No If yes, where? Yes No No 4. If you have a balance due, would you like to make a payment directly from your bank account? 5. Did you live in an area that was declared a Federal disaster area? Yes 6. Did you, or your spouse if filing jointly, receive a letter from the IRS? Many free tax preparation sites operate by receiving grant money or other federal financial assistance. The data from the following questions may be used by this site to apply for these grants or to support continued receipt of financial funding. Your answer will be used only for statistical purposes. These questions are optional. 7. Would you say you can carry on a conversation in English, both understanding & speaking? [x] Very well Well Not well 8. Would you say you can read a newspaper or book in English? 9. Do you or any member of your household have a disability? 10. Are you or your spouse a Veteran from the U.S. Armed Forces? Very well Yes Yes Not at alt Prefer not to answer Well No No Not well Prefer not to answer Prefer not to answer Not at all Prefer not to answer 11. Your race? American Indian or Alaska Native Asian Black or African American Native Hawaian or other Pacific Islander White Prefer not to answer 12. Your spouse's race? American Indian or Alaska Native Asian Black or African American Native Hawaian or other Pacific Islander White Prefer not to answer No spouse 13. Your ethnicity? 14. Your spouse's ethnicity? Additional comments Hispanic or Latino Hispanic or Latino Not Hispanic or Latino Not Hispanic or Latino Prefer not to answer Prefer not to answer No spouse I505 Privacy Act and Paperwork Reduction Act Notice The Privacy Act of 1974 requires that when we ask for information we tell you our legal right to ask for the information, why we are asking for & and how i used. We must a tel you what could happen if we do not receive it and whether your response is voluntary, required to obtain a benefit, or mandatory Our legal nght to ask for information is 5 USC 301 We are asking for this information to assisting you relative to your interest anditir participation in the IRS volunteer income tax preparation and outreach programs. The information you provide may be fumished to others who coordinate adv volunteer retum preparation sites or outreach activities. The information may also be used to establish effective controls, send comespondence and recognize volunteers, Your response is voluntary However you do not provide the requested information, the IRS may not be able to use your assistance in these programs The Paperwork Reduction Act requires that the IRS display an OMB con number on all public information requests The OMB Control Number for this study is 1545-1064 Also if you have any comments regarding the time estimates associated with this study or suggestion on making this process please write to the intemal Revenue Service Tax Products Coordinating Commitee, SEW CAR MPTT SP 1111 Constitution Ave NW, Washington, DC 20224 Catalog Number 52121E www.gov Form 13614-C (Rev 10-2021) TS-W county to patal code an ESSEX BANK, CUSTODIAN FOR TRADITIONAL IRA OF CYNTHIA SIMON 300 MARIN STREET YOUR CITY, YOUR STATE, ZIP CORRECTED I checked 2.000.00 2021 2.000.00 1099-R Taxable amou PAYERS TN REOPENTS TIN Capital gan included in 200.00 419-00-XXXX REMENTS Employee onbutors Designated Roth ployer's secure CYNTHIA SIMON Sincluding ano) insurance premiums Dabution code Omer Distributions From Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc. Copy B Report this income on your federal tax return. If this form shows federal income tax withheld in box 4, attach this copy to your return. PLE 159 ARCHER AVENUE $ This information is YOUR CITY, YOUR STATE OP 10 Amount debution being fumished the IRS 15 StawPayer's state no. 16 State distribution Roh Account number struction 13 Date of payment 17 L as w 18 Name of locality 19 Local distribution For 1099-R a Employees curty uncer 419-00-XXXX Employer denfication number N 57-200XXX Employer's name, address and 2 code ELECTRIC COMPANY 389 DAILY DRIVE YOUR CITY, STATE, ZIP Department of the Turne Service OMB No. 1545-0008 Safe, accurate, FAST Use e+ file V the RS www.gate 1 Wage, other compensation $35,000.00 2 Federal income t $2,000.00 3 4 Social $35,000.00 $2,170.00 5 Medicare and tes Medicax withheld $35,000.00 $507.50 7 Social security p Allocated p Come 10 Dependent care benes Employee's first name and inter L tt Nonqualified plane 12a See instructions for to 12 CYNTHIA SIMON 13 12 159 ARCHER AVENUE 14 Ohe 120 YOUR CITY, YOUR STATE, ZIP Employee's address and ZIP code 15 State Employer's state 10 number YS 120 57-200XXX 10. State wages, 1p, etc 17 State income tax $35,000.00 18 Local wages, hos, et 19 Local income tax 20 Layan $750.00 Form W-2 Wage and Tax Statement Copy B-To Be Feed With Employee's FEDERAL Tax Return This information is being furnished to the Internal Revenue Service 96 Advanced Scenarios 2021 Department of the Treasury-Internal Revenue Service PAYERS name, street address, city or town, state or province, country, 20 or foreign postal code, and Selephone n HOUSEKEEPERS HELPERS 123 TIDY WAY YOUR CITY, YOUR STATE, ZIP PAYERS TIN 63-400XXXXXXX RECIPIENT'S TIN 419-00-XXXXXXXX RECIPIENTS name CYNTHIA SIMON Street address including apt no) CORRECTED (if checked) OMB NM-0136 2021 Nonemployee Compensation Form 1099-NEC Copy B 4.000 For Recipient 2Payrect swing $5,000 of consumer products to recipients 3 4Federal income tax withheld 5 States with 6S Payer's state 159 ARCHER AVENUE City or town, state or province, country, and ZP or foreign postal code YOUR CITY, YOUR STATE, ZIP Account number bee instructions Form 1099-NEC Beep for your records Department of the Treasury Revenue Service ABC INVESTMENTS 450 Pima Plaza Your City, YS ZIP Form 1099-DIV 2021 Dividends and Distributions Copy for ROM NO 1545-0110 faTotal Ordinary Dividends 1b Qualified Dividends 2a Total Capital Gain Distributions (Includes 2b-2d). 2b Capital Gains that represent Unrecaptured 1250 Gain. 20 Capital Gains that represent Section 1202 Gain. 2d Capital Gains that represent Collectibles (28%) Gain 2 Nondividend Distributions. 4 Federal Income Tax Withheld 5 Investment Expenses 6 Foreign Country or U.S. Possession 2021 TAX REPORTING STATEMENT Cynthia Simon 159 Archer Avenue Your City, YS ZIP Account No. 111-222 Recipient ID No. 419-00-3000x Payer's Fed ID Number: 40-200000 150.00 75.00 300.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 7 Cash Liquidation Distributions 0.00 8 Non-Cash Liquidation Distributions 0.00 9 Exempt Interest Dividends 0.00 10 Specified Private Activity Bond Interest Dividends 11 State 12 State Identification No. 0.00 13 State Tax Withheld Form 1099-MISC 2021 Miscellaneous Income Copy & for Recipe (OMB NO 1545-0115) 0.00 2 Royalties. 0.00 4 Federal Income Tax Withheld 16 State Tax Withheld 8 Substitute Payments in Lieu of Dividends or Interest 0.00 0.00 17 State Payer's State No. 18 State Income 0.00 Form 1099-INT 2021 Interest Income Copy for Recipient OMB NO 1545-0112) 1 Interest income. 250.00 2 Early Withdrawal Penalty 0.00 3 Interest on U.S. Savings Bonds and Treas. Obligations. 0.00 4 Federal Income Tax Withheld 0.00 5 Investment Expenses 0.00 6 Foreign Tax Paid 0.00 7 Foreign Country or U.S. Possession. 0.00 8 Tax-Exempt Interest 0.00 9 Specified Private Activity Bond Interest 0.00 14 Tax-Exempt Bond CUSIP No.. Summary of 2021 Proceeds From Broker and Barter Exchange Transactions Sales Price of Stocks, Bonds, etc.. Federal Income Tax Withheld 6,150.00 0.00 Gross Proceeds from each of your security transactions and reported individually to the RS Refer to the Form 1099-0 section of this statement Report gross proceeds individually for each security on the appropriate RS tex refur. Do not report gross proceeds in aggregate 2021 Page 1 of 2 ABC INVESTMENTS 456 Pima Plaza Your City. YS ZIP 2021 TAX REPORTING STATEMENT Cynthia Simon 159 Archer Avenue Your City YS ZIP Account No. 111-222 Recipient ID No. 419-00-300XX Payer's Fed ID Number: 40-200000XxX FORM 1099-B 2021 Proceeds from Broker and Barter Exchange Transactions Copy for Recipient OMB NO 1545-07S Short-term transactions for which basis is reported to the IRS Report on Form 8949 with Box A checked and/or Schedule D. Part 1 (This Label sa Substitute for Boss 1c 8 Description 1d Stock or Other Symbol, CUSP Action Acquired 16 Dated a Quantity Sold Iowa Co. Common Stock (IRS Form 1099-8 box numbers are shown below in bold type) Other Basis Sale 01/08/2021 10/30/2021 200.000 2.650.00 TOTALS 2,650.00 2,000.00 2.000.00 650.00 FORM 1099-B 2021 Proceeds from Broker and Barter Exchange Transactions Copy for Recipient OMB NO 1545-0715 Long-term transactions for which basis is not reported to the IRS Report on Form 8949 with Box E checked and/or Schedule D. Part (This Label Substitute for Boxes 10 & 6) 8 Description, 1d Stock or Other Symbol, CUSP 1d Proceeds Costor Other B ORS Form 1099-8 box numbers are shown below in bold type) Oan/Loss S Action 16 Date Acquired 10 Date de Quantity disposed lowa Co. Common Stock Sale 10/12/2008 11/01/2021 200 000 TOTALS 3,500.00 3,500.00 2.100.00 2,100.00 1,400 00 Lass Dallowed T 15 Sane Tax This is important tax information and is being fumished to the internal Revenue Service. If you are required to file a return, a negligence penalty or other sanction may be imposed on you if this income is taxable and the IRS determines that it has not been reported Page 2 of 2 VOID OPENTSANDSty of town FINANCIAL AID PARTNERS 305 WASHINGTON DR YOUR CITY, YOUR STATE ZIP RECIPIENTS IN CYNTHIA SIMON 19 ARCHER AVENUE YOUR CITY, YOUR STATE ZIP 1096-E postal de eid phone number SUFFOLK COLLEGE 10 COLLEGE AVENUE CORRECTED OMB No 1545-1576 2021 Tom1098-E Student Loan Interest Statement BORROWERS TH 419-00-XXXXX 1 Student interest received by lender 3.570.00 does not include loan ongination fees Copy C For Recipient For Privacy Act and Paper Reduction Act Notice, see the 201 Genera Instructions for Certain information Returns Department of the Treasury-tale S www. CORRECTED OMD No. 1645-1574 qualfed tution and 2,000.00 2021 Fom 1098-T Tuition Statement YOUR CITY, YOUR STATE, ZIP 37-700XXXXXXX STUCCHY'name CYNTHIA SIMON 159 ARCHER AVENUE Copy B For Student STUDENT'S IN 419-40-XXXXX Adustments made for a 5 Scholarships or grants This Cytown state or proven country, and ZP or foreign postcode YOUR CITY, YOUR STATE, ZIP F1098-T scholarships or grants 7 Checked the amount in box includes amounts for an academic period beginning January March 2022 10 ins contract reimb/refund Checked if a wast time student for your record Checked a graduate student www.irs.gov Farm10067 S tax information and being ushed to the IRS This form complete Fom 8063 to claim education credits Give it to the tax preparer or prepare the tax um Department of the Treasury Internal Revenue Service 1095-A Health Insurance Marketplace Statement Do not attach to your tax return. Keep for your records. Go to www.irs.gov/Form 10954 for instructions and the latest information Part Recipient Information 12-3456789 VOID CORRECTED OMD N. 1545-2233 2021 CYNTHIA SIMON 7 Recipient's spouse's 987654 6 Recounts 554 419-00-XXXX 2/24/1992 10 Pocy start d 11 y termination sta 01/01/2021 12/31/2021 13 Cytown 14 State or province YOUR CITY YOUR STATE 159 ARCHER AVENUE 15 Country and Portoghe ZIP Part II Covered Individuals A. Covered individual name B. Covered india C. Cel D. Coverage Coverage na R CYNTHIA SIMON 16 419-00-XXXX 2/24/1992 01/01/2021 12/31/2021 17 19 20 Part III Coverage Information Month A. Monthly enrolment premiums B. Monthly second lowest cost silver plan (SLCSP) premium C. Monthly advance payment of premium tax cred 21 January $200 $330 $150 22 February $200 $330 $150 $200 $330 $150 23 March 24 April $200 $330 $150 25 May $200 $330 $150 26 June $200 $330 $150 $200 $330 $150 27 July $200 $330 $150 28 August $200 $330 $150 29 September $200 $330 $150 30 October 31 November $200 $330 $150 $200 $330 $150 32 December 33 Annual Totals $2,400 $3,960 $1,800 For Privacy Act and Paperwork Reduction Act Notice, see separate instructions. Cat No607000 Form 1095-A21) vanced Scenario 8: Test Questions 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. 23. What is the net short term capital gain reported on Cynthia's Schedule D? a. $2,350 b. $1,400 c. $650 d. $300 24. Which of the following cannot be claimed as a business expense on Cynthia's Schedule C? a. Cleaning supplies b. Business cards c. Lunches d. Work gloves 25. What is the amount Cynthia can take as a student loan interest deduction on her Form 1040, Schedule 1? $ 26. What is the total amount of advanced premium tax credit that Cynthia received in 2021? a. $3,960 b. $2,400 c. $1,800 d. $150 27. What is the amount of Cynthia's lifetime learning credit? $