Bob is working on his 2018 Form 1040 he just finished computing his Adjusted Gross Income (AGI) on Line 7 of his Form 1040. He has asked if you could help him prepare his 2018 Schedule A Itemized Deductions. Bobs 2018 AGI reported on his Form 1040, Line 7 is $101,520.00, and he is a single taxpayer.
Directions
- Prepare Schedule A
- Download Application Assignment - Individual Deductions.docx
and Schedule A - Individual Deductions Practical Application.pdf
. - Complete Lines 1 - 17 of Schedule A using the table of information
2018 Mortgage Interest Statement CORRECTED (if checked) RECIPIENTS/LENDER'S name, street address, city or town, state or *Caution: The amount shown may OMB No. 1545-0901 province, country, ZIP or foreign postal code, and telephone no. not be fully deductible by you. Limits based on the loan amount and the cost and value of the Forever Loans Credit Union secured property may apply. Also, you may only deduct interest to the extent it was incurred by you, actually paid by you, and not reimbursed by another person. Form 1098 1 Mortgage interest received from payer(s)/borrower(s)* $ 11,875.00 RECIPIENT'S/LENDER'S TIN P AYER'S/BORROWER'S TIN 2 Outstanding mortgage 3 Mortgage origination date principal as of 1/1/2018 $ 241,500.00 08/21/2017 4 Refund of overpaid 5 Mortgage insurance interest premiums PAYER'S/BORROWER'S name Bob 6 Points paid on purchase of principal residence Street address (including apt. no.) 7 X If address of property securing mortgage is the same as PAYER'S/BORROWER'S address, the box is checked, or the address or description is entered in box 8. Copy B For Payer/ Borrower The information in boxes 1through 9 is important tax information and is being furnished to the IRS. If you are required to file a return, a negligence penalty or other sanction may be imposed on you if the IRS determines that an underpayment of tax results because you overstated a deduction for this mortgage interest or for these points, reported in boxes 1 and 6; or because you didn't report the refund of interest (box 4); or because you claimed a nondeductible item. City or town, state or province, country, and ZIP or foreign postal code 8 Address or description of property securing mortgage (see instructions) 9 Number of properties securing the 10 Other mortgage Account number (see instructions) Form 1098 (Keep for your records) www.irs.gov/Form1098 Department of the Treasury - Internal Revenue Service Description 2018 Expense Amount Additional Details Source Document Casino account summary Gambling losses 5,150 Woodworking expenses 3,330 Store receipts Bob reported $4,750 of gambling winnings on his 2018 Schedule 1, Line 21 Bob whittles animals out of wood as a hobby and sells them to friends & family; in 2018 he reported $5,100 of woodworking income on his 2018 Schedule 1, Line 21 Bob underwent a costly life-saving surgery in 2018 - this amount represents his out-of-pocket costs that were not reimbursed through insurance Unreimbursed qualified medical expenses 19,980 Hospital invoices Mortgage interest 11,875 Form 1098 Mortgage is secured by Bob's principal residence Home Equity Line of Credit ("HELOC") interest 2,385 Bank statement Bob's principal residence was used to secure the loan; loan proceeds were used to pay off credit card debt Bob's principal residence was used to secure the loan; loan proceeds were used to purchase a new roof for Bob's principal residence Home Equity Line of Credit (HELOC") interest 4,625 Bank statement State income taxes 8,185 State tax return State sales taxes 2,240 Receipts Real estate taxes 2,650 Bank statement Personal property taxes 470 Car registration Tax preparation fees 300 Receipts Union dues 1,500 Paystubs Cash gifts to charity 750 501(c)(3) receipts Personal records Cash gifts to local homeless man 1,040 2018 Mortgage Interest Statement CORRECTED (if checked) RECIPIENTS/LENDER'S name, street address, city or town, state or *Caution: The amount shown may OMB No. 1545-0901 province, country, ZIP or foreign postal code, and telephone no. not be fully deductible by you. Limits based on the loan amount and the cost and value of the Forever Loans Credit Union secured property may apply. Also, you may only deduct interest to the extent it was incurred by you, actually paid by you, and not reimbursed by another person. Form 1098 1 Mortgage interest received from payer(s)/borrower(s)* $ 11,875.00 RECIPIENT'S/LENDER'S TIN P AYER'S/BORROWER'S TIN 2 Outstanding mortgage 3 Mortgage origination date principal as of 1/1/2018 $ 241,500.00 08/21/2017 4 Refund of overpaid 5 Mortgage insurance interest premiums PAYER'S/BORROWER'S name Bob 6 Points paid on purchase of principal residence Street address (including apt. no.) 7 X If address of property securing mortgage is the same as PAYER'S/BORROWER'S address, the box is checked, or the address or description is entered in box 8. Copy B For Payer/ Borrower The information in boxes 1through 9 is important tax information and is being furnished to the IRS. If you are required to file a return, a negligence penalty or other sanction may be imposed on you if the IRS determines that an underpayment of tax results because you overstated a deduction for this mortgage interest or for these points, reported in boxes 1 and 6; or because you didn't report the refund of interest (box 4); or because you claimed a nondeductible item. City or town, state or province, country, and ZIP or foreign postal code 8 Address or description of property securing mortgage (see instructions) 9 Number of properties securing the 10 Other mortgage Account number (see instructions) Form 1098 (Keep for your records) www.irs.gov/Form1098 Department of the Treasury - Internal Revenue Service Description 2018 Expense Amount Additional Details Source Document Casino account summary Gambling losses 5,150 Woodworking expenses 3,330 Store receipts Bob reported $4,750 of gambling winnings on his 2018 Schedule 1, Line 21 Bob whittles animals out of wood as a hobby and sells them to friends & family; in 2018 he reported $5,100 of woodworking income on his 2018 Schedule 1, Line 21 Bob underwent a costly life-saving surgery in 2018 - this amount represents his out-of-pocket costs that were not reimbursed through insurance Unreimbursed qualified medical expenses 19,980 Hospital invoices Mortgage interest 11,875 Form 1098 Mortgage is secured by Bob's principal residence Home Equity Line of Credit ("HELOC") interest 2,385 Bank statement Bob's principal residence was used to secure the loan; loan proceeds were used to pay off credit card debt Bob's principal residence was used to secure the loan; loan proceeds were used to purchase a new roof for Bob's principal residence Home Equity Line of Credit (HELOC") interest 4,625 Bank statement State income taxes 8,185 State tax return State sales taxes 2,240 Receipts Real estate taxes 2,650 Bank statement Personal property taxes 470 Car registration Tax preparation fees 300 Receipts Union dues 1,500 Paystubs Cash gifts to charity 750 501(c)(3) receipts Personal records Cash gifts to local homeless man 1,040
