Based on the 2019 Form 1040 with supportive forms and the information provided below, please prepare 2019 California Return for Jason & Nicole Miller. They reside at 15 Maple Street in San Jose, CA 95134. Refer to the CA Form 540 Instructions, Week 9 supplemental lectures for the mechanics of CA Individual Tax Forms.

Jason Miller was born May 1, 1967 and works as an engineer at ABC Technology, his taxable wages (after 401k deductions, etc.) is $145,000 per year. His wife Nicole Miller (born June 2, 1969) was a bookkeeper for Als Supermarket she earned $33,000 during the first 9 months of the year and then was laid off for the rest of 2019. Their wage amounts are the same for federal and California. Nicole has also received $11,000 in unemployment compensation from the state of California.

In 2019 Jason and Nicole were covered by a healthcare plan offered through Jasons company.

Jason has had $28,200 of Federal income taxes withheld from his paychecks and $10,000 California income taxes withheld from his paychecks. Nicole had $1,800 Federal income tax and $1,000 California income tax withheld from her Als Supermarket paycheck. There were no taxes withheld on her unemployment compensation.

They have sold 100 shares of ABC Technology stocks during the year for $62,000 that they acquired in 2005 for $55,000. Note that everything they sold is long-term capital gains. You should assume that the cost basis for California purposes is the same as for Federal purposes. None of the stocks sold are qualified small business stock.

They received $400 of qualified dividend income from their ABC Technology stock. They also received interest income of $156 from Wells Fargo Bank. Nicole is originally from Las Vegas, NV and a few years ago her parents gave her some City of Las Vegas municipal bonds which she still owns. She received $600 of interest income from these bonds which is tax exempt for Federal income tax purposes.

They have children but they finished college and have moved out Jason and Nicole do not support them.

They have owned their own home in San Jose since 1999, have mortgage interest of $13,800, and property taxes of $5,000. They own two cars and the deductible part of their DMV fees is $150. In April 2019, they filed their joint 2018 California income tax return and paid $1000 tax due to California.

Here is a list of their cash donations to various organizations:

Saint Marys (Roman Catholic Church) $2,000

Second Harvest Food Bank $500

Santa Clara University (Fundraising Campaign) $1,000

Make-A-Wish Foundation $100

With time on her hands, Nicole has prepared and filed their joint federal Form 1040 but she has hired you to prepare the California Form 540 (and any required schedules).

You need to prepare a California Form 540 and a California Schedule CA540. If required, you should also prepare a California Schedule D540 (hint: read the directions). You may assume there is NO Federal or California AMT to consider.

Instructions

1. Review Miller Form 1040
2. Download fill-in California Form 540 and Schedule 540(CA) and Form Instructions.
3. Start with 540(CA) to identify Federal/California differences
4. Move to Form 540 - line 13 is Federal AGI $196,556
5. Use 540 Instructions, CA (540) to complete Form 540

Checks: Form 540, Line 94 Overpaid Tax is $1,692