Comprehensive Problem 2-1

Beverly and Ken Hair have been married for 3 years. Beverly works as an accountant at Cypress Corporation. Ken is a full-time student at Southwest Missouri State University (SMSU) and also works part-time during the summer at Cypress Corp. Ken's birthdate is January 12, 1994 and Beverly's birthdate is November 4, 1996. Beverly and Ken each received a W-2 form from Cypress Corporation (see separate tab).

The Hairs have interest income of $956 on City of St. Louis bonds. Beverly and Ken also received a Form 1099-INT from Boatman's Bank and a 1099-DIV form from Green Corporation (see separate tab).

Ken is an excellent student at SMSU. He was given a $1,750 scholarship by the university to help pay educational expenses. The scholarship funds were used by Ken for tuition and books.

Last year, Beverly was laid off from her former job and was unemployed during January 2020. She was paid $1,847 of unemployment compensation until she started work with her current employer, Cypress Corporation.

Ken has a 4-year-old son, Robert R. Hair, from a prior marriage that ended in divorce in 2015. During 2020, he paid his ex-wife $300 per month in child support. Robert is claimed as a dependent by Ken's ex-wife.

During 2020, Ken's aunt died. The aunt, in her will, left Ken $15,000 in cash. Ken deposited this money in the Boatman's Bank savings account.

Beverly and Ken received a $2,400 EIP in 2020.

Required: Complete the Hairs' Form 1040, Schedule 1, and the Qualified Dividends and Capital Gain Tax Worksheet. The Hair's had health cover for the entire year. They do not want to make any contribution to the presidential election campaign. Make any other realistic assumptions about any missing data. If an amount box does not require an entry or if an amount is zero, enter "0". Enter amounts as positive numbers. If required, round amounts to the nearest dollar.

_________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________ _______________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

Shortcuts:

_______

Beverly Hair ( W2 ) Wages, tips, other compensation $51,000

Ken Hair ( W2) Wages, tips, other compensation $2,750

Beverly Federal income tax withheld $4,610.00

Ken Federal income tax withheld $0.00

Ken is an excellent student at SMSU. He was given a $1,750 scholarship by the university to help pay educational expenses. The scholarship funds were used by Ken for tuition and books

Interest Income on form 1099-INT $656.62

Total ordinary dividends on form 1099-DIV $302.00 Qualified dividends on form 1099-DIV $302.00

She was paid $1,847 of unemployment compensation

Ken has a 4-year-old son, Robert R. Hair, from a prior marriage that ended in divorce in 2015. During 2020, he paid his ex-wife $300 per month in child support. Robert is claimed as a dependent by Ken's ex-wife.

During 2020, Ken's aunt died. The aunt, in her will, left Ken $15,000 in cash. Ken deposited this money in the Boatman's Bank savings account.

Ken is an excellent student at SMSU. He was given a $1,750 scholarship by the university to help pay educational expenses. The scholarship funds were used by Ken for tuition and books.

What is the correct answer please? where is my mistake please ?

Form 1040 Form 1040 (2020) Page 2 16 16 3,430 X Tax (see instructions). Check if any from Form(s): 108814 2 4972 30 Amount from Schedule 2, line 3.. 17 17 18 Add lines 16 and 17 ... 18 3,430 x 19 Child tax credit or credit for other dependents 19 20 Amount from Schedule 3, line 7.. 20 21 Add lines 19 and 20. 21 22 Subtract line 21 from line 18. If zero or less, enter -o- . 22 3,430 x 23 Other taxes, including self-employment tax, from Schedule 2, line 10 23 24 Add lines 22 and 23. This is your total tax ... 24 3,430 x 25 Federal income tax withheld from: .. 25a 4,610 a Form(s) W-2 b Form(s) 1099.. c Other forms (see instructions) 25b 250 25d 4,610 If you have a qualifying child, attach Sch. EIC. If you have nontaxable d Add lines 25a through 25c. 26 2020 estimated tax payments and amount applied from 2019 return 27 Earned income credit (EIC).. 27 26 28 Additional child tax credit. Attach Schedule 8812 28 Form 1040 Form 1040 (2020) Page 2 16 16 3,430 X Tax (see instructions). Check if any from Form(s): 108814 2 4972 30 Amount from Schedule 2, line 3.. 17 17 18 Add lines 16 and 17 ... 18 3,430 x 19 Child tax credit or credit for other dependents 19 20 Amount from Schedule 3, line 7.. 20 21 Add lines 19 and 20. 21 22 Subtract line 21 from line 18. If zero or less, enter -o- . 22 3,430 x 23 Other taxes, including self-employment tax, from Schedule 2, line 10 23 24 Add lines 22 and 23. This is your total tax ... 24 3,430 x 25 Federal income tax withheld from: .. 25a 4,610 a Form(s) W-2 b Form(s) 1099.. c Other forms (see instructions) 25b 250 25d 4,610 If you have a qualifying child, attach Sch. EIC. If you have nontaxable d Add lines 25a through 25c. 26 2020 estimated tax payments and amount applied from 2019 return 27 Earned income credit (EIC).. 27 26 28 Additional child tax credit. Attach Schedule 8812 28