Beth R. Jordan lives at 2322 Skyview Road, Mesa, AZ 85201. She is a tax accountant with Mesa Manufacturing Company, 1203 Western Avenue, Mesa, AZ 85201 (employer identification number 11-1111111). She also writes computer software programs for tax practitioners and has a part-time tax practice. Beth is single and has no dependents. Beth was born on July 4, 1974, and her Social Security number is 123-45-6785. She wants to contribute $3 to the Presidential Election Campaign Fund. Beth received the appropriate coronavirus recovery rebates (economic impact payments); related questions in ProConnect Tax should be ignored.

The following information is shown on Beth's Wage and Tax Statement (Form W2) for 2020.

Line	Description	Amount
1	Wages, tips, other compensation	$65,000.00
2	Federal income tax withheld	9,500.00
3	Social Security wages	65,000.00
4	Social Security tax withheld	4,030.00
5	Medicare wages and tips	65,000.00
6	Medicare tax withheld	942.50
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 1099INT. 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 1099DIV.

Beth received a $1,100 income tax refund from the state of Arizona on April 29, 2020. On her 2019 Federal income tax return, she claimed the standard deduction.

Fees earned from her part-time tax practice in 2020 totaled $3,800. She paid $600 to have the tax returns processed by a computerized tax return service.

On February 8, 2020, Beth bought 500 shares of Gray Corporation common stock for $17.60 a share. On September 12, 2020, Beth sold the stock for $14 a share.

Beth bought a used sport utility vehicle for $6,000 on June 5, 2020. She purchased the vehicle from her brother-in-law, who was unemployed and was in need of cash. On November 2, 2020, she sold the vehicle to a friend for $6,500.

On January 2, 2020, Beth acquired 100 shares of Blue Corporation common stock for $30 a share. She sold the stock on December 19, 2020, for $55 a share.

During the year, Beth records revenues of $16,000 from the sale of a software program she developed. Beth incurred the following expenses in connection with her software development business.

Cost of personal computer	$7,000
Cost of printer	2,000
Furniture	3,000
Supplies	650
Fee paid to computer consultant	3,500

Beth elected to expense the maximum portion of the cost of the computer, printer, and furniture allowed under the provisions of 179. These items were placed in service on January 15, 2020, and used 100% in her business.

Although her employer suggested that Beth attend an in-person conference on current developments in corporate taxation, Beth was not reimbursed for the travel expenses of $1,420 she incurred in attending the meeting. The $1,420 included $200 for the cost of meals.

During the year, Beth paid $300 for prescription medicines and $2,875 for doctor bills and hospital bills. Medical insurance premiums were paid by her employer. Beth paid real property taxes of $1,766 on her home. Interest on her home mortgage (Valley National Bank) was $3,845, and credit card interest was $320. Beth contributed $2,080 to various qualifying charities during the year. Professional dues and subscriptions totaled $350.

Beth paid estimated taxes of $1,000.

Beth is anticipating significant changes in her life in 2021, and she has asked you to estimate her taxable income and tax liability for 2021.

Beth just received word that she has been qualified to adopt a 2-year-old daughter. Beth expects that the adoption will be finalized in 2021 and that she will incur approximately $2,000 of adoption expenses.

In addition, she expects to incur approximately $3,500 of child and dependent care expenses relating to the care of her new daughter, which will enable her to keep her job at Mesa Manufacturing Company. However, with the additional demands on her time because of her daughter, she has decided to discontinue her two part-time jobs (i.e., the part-time tax practice and her software business), and she will cease making estimated income tax payments.

In your computations, assume that all other 2021 income and expenses will be the same as 2020 amounts. There no personal or dependency exemptions allowed in 2021. Medical deductions are subject to a 7.5% reduction of AGI in 2021. Beth's rate for the child an dependent care credit is 50% and she is entitled to the full child tax credit and adoption credit as well.

What are the correct amounts? I need help with the tax planning. Please use 2020 tax rates for Head of Household.

For 2021, determine the following for Beth: Filing status: Head of Household Total gross income: $ 73,150 x Adjusted gross income: $ 65,000 X The greater of total itemized deductions or standard deduction: $ 18,800 Non-itemizer charitable contribution deduction: $ 2,080 X Taxable income: $ 44,120 Tax liability: $ 5,010 Total tax credits: $ 4,510 x 9,500 Income taxes withheld: $ Refund due: $ 10,976 of the amount Head of household-Schedule Z If taxable income is: But not Over- over- The tax is: : $ 0 $ 14,200 ......... 10% 14,200 54,200 $ 1,420.00 + 12% over- $ 0 14,200 54,200 86,350 6,220.00 + 22% 54,200 86,350 164,900 13,293.00 + 24% 86,350 164,900 32,145.00 + 32% 209,400 523,600 164,900 209,400 209,400 46,385.00 + 35% 523,600 156,355.00 + 37% 523,600