Comprehensive Problem 5-1

John Williams (birthdate August 2, 1976) is a single taxpayer. John's earnings and withholdings as the manager of a local casino for 2019 are reported on his Form W-2 (see separate tab).

John received Form 1098 from the Reno Bank & Trust (see separate tab).

John's other income includes interest on a savings account at Nevada National Bank of $13,691.

John pays his ex-wife, Sarah McLoughlin, $3,900 per month in accordance with their February 12, 2013 divorce decree. When their 12-year-old child (in the ex-wife's custody) reaches the age of 18, the payments are reduced to $2,800 per month. His ex-wife's Social Security number is 554-44-5555.

In 2019, John purchased a new car and so he kept track of his sales tax receipts during the year. His actual sales tax paid is $3,700, 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 $75 in 2019.

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	6,000
Property taxes on personal residence	2,700
Contributions to HSA	2,850
Income tax preparation fee	900
Charitable contributions (all cash):
Boy Scouts	1,350
St. Matthews Church	3,100
University of Nevada (Reno) Medical School	27,000
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 as well Form 8889.

• 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.

John's W-2 Form

John's earnings and withholdings as the manager of a local casino for 2019 are reported on his Form W-2:

a Employee's social security number 555-94-9358

OMB No. 1545-0008

Safe, accurate, FAST! Use

IRS e ~ file

Visit the IRS website at www.irs.gov/efile

b

Employer identification number (EIN) 31-1459656

1

Wages, tips, other compensation 196,000.00

2

Federal income tax withheld 25,000.00

c

Employer's name, address, and ZIP code Lucky Ace Casino 700 N. Sierra Street Reno, NV 89503

3

Social security wages 132,900.00

4

Social security tax withheld 8,239.80

5

Medicare wages and tips 196,000.00

6

Medicare tax withheld 2,842.00

7

Social security tips

8

Allocated tips

d

Control number

9

10

Dependent care benefits

e

Employee's first name and initial John Williams 1324 Skyewalker Drive Reno, NV 89501

Last name

Suff.

11

Nonqualified plans

12a

See instructions for box 12

C o d e

13

Statutory employee	Retirement plan	Third-party sick pay

12b

C o d e

14

Other

12c

C o d e

12d

C o d e

f

Employee's address and ZIP code

15 State NV		Employer's state ID number	16	State wages, tips, etc.	17	State income tax	18	Local wages, tips, etc.	19	Local income tax	20	Locality name

Form W-2

Wage and Tax Statement

2019

Department of the TreasuryInternal Revenue Service

Copy BTo Be Filed With Employee's FEDERAL Tax Return.

This information is being furnished to the Internal Revenue Service.