Complete a 2018 Form 1040, based upon the below fact pattern. Show the amount of refund or amount owed.

For the same fact pattern, complete a 2018 Form 540 California State Tax Return thru taxable income only.

-Susan and Bill Hassenhof have W-2 Wages of $98,000. Federal Tax Withheld was $9,000 and State Income Tax Withheld was $3,500

-Bill is an accounts payable clerk and Susan is a high school math teacher

-Bill received unearned income (interest) of $600 from the Bernay Madeoff Bank in Trust

-Bill tried his luck at Super Duper Guaranteed to Win Bingo in 2018. He wagered $750 and lost it all

-The Hassenhofs want to take the largest deduction they can in 2018, either the Standard Deduction OR Itemized Deduction

-Susan and Bill are both 45 years old and neither one is blind

-Susan sent her Mom $600 to help her Mom pay her property tax bill

-The Hassenhofs took dancing lessons in 2018 that cost $850

-Bill owes the IRS $1,200 from his 2016 Tax Return. He is paying $100 a month on this debt

-Susan helped her friend start a business. The friend plans on paying Susan $6,000 for all the work

she did. This payment will be made in December 2019

-Bill got arrested for driving with a suspended license, no insurance, no current registration, reckless driving, using a cell phone while driving, open container in vehicle, leaving the scene of an accident, and resisting arrest. He spent 6 days in jail and calculated he lost $1,900 in wages since he could not work while he was locked up. Bill paid the court $1,200 for the fine and enrolled in an anger management course which cost him $500.

-Susan drove 2,000 miles in 2018 to go to work. She has documentation of all her miles driven

-Susan sued a former employer for Intentional Infliction of Emotional Distress in 2018. She was

awarded $25,000 by the court. Susan has not received a check for the $25,000 award. The former employer has filed an appeal and the case is now with the U.S. 9^th Circuit Court of Appeals. Susans attorney told her she may win the case.

-Bills 401K Account had a balance of $525,000 as of January 1, 2018

-Bill wanted to start a weed cutting business in 2018. He applied for a business loan and was approved for sale in late 2018 for $40,000. Interest rate will be 6%, term is 10 years, and the loan funded on June 15, 2019

-In 2018, Susan sold a Gold and Silver Chess Set she owned to an art dealer she knows. The Chess Set was purchased for $7,600 on February 20, 2018, and Susan sold it for $8,600 on December 12, 2018.

-Bill and Susan had a rental home they sold in 2017. In 2018, they returned a $800 security deposit to the tenant after the tenant moved out.

-Bill and Susan paid $140 in 2018 for their B.P.O Elks Club membership. The Elks is a fraternal organization. Bill and Susan go to the Elks to dance, have dinners, drink, and socialize.

-In 2018, Bills restored 1964 Ford Mustang was destroyed in a grass fire which struck his neighborhood. Bills adjusted basis in the vehicle was $35,000. His insurance company paid Bill $10,000 for the loss. The fire area was not in a Presidentially Declared Disaster Area.

-Susan took their dog Billy to the vet in 2018 and paid $800 for the vet bill to fix the dogs paw

-Susan decided in 2018 to become a self-employed tutor. She taught 4 kids business planning and

was paid $200. Her business expenses were $25 for business cards, $100 for business travel, and $150 for pencils, paper, and study guides. Susan also tells you she paid Mystic Maria the Fortune Teller $1,450 to predict Susans success. Maria reported that Susan would be wildly successful in her tutoring business and make $400 in 2019. Maria also said Susan should get her fortune updated every month for $30. Susan paid a total of $1,750 in 2018 for Marias services.

-In 2018, Bill volunteered for Its me, Not You, a Qualified Charitable Organization. He logged 300 hours and calculated he drove 500 miles for charity related travel.

-Susan was called to Jury Duty in 2018. She was paid $80 for her service and did NOT have to give her jury duty pay to her employer. Bill asked Susan if she would donate the $80 to Its me, Not You. Susan cashed the check and donated $80 to the charity.

-Bill won a $2,800 cash prize from a local grocery store in 2018. Bill said he did NOT get a W-2 or a Form 1099 for the $2,800 he won.

The text book I'm using is (Income Tax Fundamentals 2020, 38^th Edition)