Comprehensive Problem 7-1

David and Darlene Jasper have one child, Sam, who is 6 years old (birthdate July 1, 2014). The Jaspers reside at 4639 Honeysuckle Lane, Los Angeles, CA 90248. David's Social Security number is 577-11-3311, Darlene's is 477-98-4731, and Sam's is 589-22-1142. David's birthdate is May 29, 1987 and Darlene's birthday is January 31, 1989. David and Darlene's earnings and withholdings for 2020 are:

David:	Earnings from Apple Company (office manager)	$26,750
	Federal income tax withheld	800
	State income tax withheld	1,050
Darlene:	Earnings from Rose Company (perfume tester)	$26,200
	Federal income tax withheld	1,050
	State income tax withheld	1,000

Their other income includes interest from Pine Tree Savings and Loan of $950. Other information and expenditures for 2020 are as follows:

Interest:	On home acquisition mortgage	$11,300
	Credit card	925
Taxes:	Property taxes on personal residence	1,300
	State income taxes paid in 2020 (for 2019)	300
Contribution (with written acknowledgement) to church	1,045
Medical insurance	675
Medical and dental expenses	6,175
Income tax return preparation fee paid in 2020	200
Actual general state sales tax for 2020	1,016
Payment of union dues	225
Contribution to David's IRA (no retirement plan at his work)	500

David and Darlene received a letter from Sam's daycare provider which contains information regarding child care expenses.

The Jaspers received a $2,900 EIP in 2020.

Required: Complete David and Darlene's Form 1040, Schedule 1, Schedule 3, Schedule A, Form 2441, and Form 8880.

• Make realistic assumptions about any missing data.
• The taxpayers do not want to make a contribution 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 (unless instructed otherwise on the tax form).
• Assume alternative minimum tax is not a factor.

David and Darlene received the following letter from Sam's daycare provider:

KIDDIECARE INC. 10250 Santa Monica Blvd. Los Angeles, CA 90067 EIN: 13-3345678

January 14, 2021

David and Darlene Jasper 4639 Honeysuckle Lane Los Angeles, CA 90248

Dear David and Darlene,

Thank you for your patronage of our day care center with your child, Sam Jasper, in 2020. This statement serves as a record of the cost of daycare services we provided during calendar year 2020:

Child	Amount	Dates of Service
Sam Jasper	$3,680.00	1/1/2020 08/25/2020

Sincerely,

/s/ Marcia Clarke

Marcia Clarke Director, KiddieCare Inc.

Complete the Jaspers' Form 1040. Complete the Jasper's Schedule 1. Complete the Jaspers' Schedule 3. Complete the Jaspers' Schedule A to determine whether the taxpayers will itemize their deductions or use the standard deduction. Complete the Jaspers' Form 2441 (page 1). Complete the Jaspers' Form 8880.