Comprehensive Problem 5-1

John Williams (birthdate August 2, 1974) is a single taxpayer. John's earnings and withholdings as the manager of a local casino for 2018 are reported on his Form W-2.

John received Form 1098 from the Reno Bank & Trust.

John's other income includes interest on a savings account at Nevada National Bank of $13,700.

John pays his ex-wife, Sarah McLoughlin, $3,900 per month in accordance with their 2012 divorce decree. When their 12-year-old child (in the ex-wife's custody) reaches the age of 18, the payments are reduced to $2,725 per month. His ex-wife's Social Security number is 554-44-5555.

In 2018, John purchased a new car and so he kept track of his sales tax receipts during the year. His actual sales tax paid is $3,660, which exceeds the estimated amount per the IRS tables.

John participates in a high-deductible health plan and is eligible to contribute to a health savings account. His HSA earned $125 in 2018.

During the year, John paid the following amounts (all of which can be substantiated):

Credit card interest

$1,760

Auto loan interest

4,300

Auto insurance

900

Contribution to IRA

5,500

Property taxes on personal residence

2,640

Contributions to HSA

2,800

Income tax preparation fee

900

Charitable contributions (all cash):

Boy Scouts

1,350

St. Matthews Church

3,100

U. of Nevada (Reno) Medical School

26,900

Nevada Democratic Party

250

Fund-raising dinner for the Reno Auto Museum

100

(value of dinner is $25)

Required:

Complete John's Form 1040 and Schedules 1, A and B.

Make realistic assumptions about any missing data.

John had health coverage for the entire year and he does not want to contribute to the presidential election campaign,

Enter all amounts as positive numbers.

If an amount box does not require an entry or the answer is zero, enter "0".

If required round any dollar amount to the nearest dollar.

Gifts to Charity

If you made a gift and got a benefit for it, see instructions.

11Gifts by cash or check. If you made any gift of $250 or more,see instructions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .11

12Other than by cash or check. If any gift of $250 or more, see instructions. Youmustattach Form 8283 if over $500 . . . . . .12

13Carryover from prior year . . . . . . . . . . . . . . . . . . . . . . . . . .13

14Add lines 11 through 13 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .14

Casualty and Theft Losses

15Casualty and theft loss(es) from a federally declared disaster (other than net qualified disaster losses). Attach Form 4684 and enter the amount from line 18 of that form. See instructions15

Other Miscellaneous Deductions

16Otherfrom list in instructions. List type and amount _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _16

Total Itemized Deductions

17Add the amounts in the far right column for lines 4 through 16. Also, enter this amount on Form 1040, line 8 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .17

18If you elect to itemize deductions even though they are less than your standard deduction, check here . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .