Compute Cecils 2021 Federal income tax payable (or refund due) and prepare a U.S Individual Income Tax Refund (Form 1040) for the year 2020.
INFO:
Cecil C. Seymour is a 64-year-old widower. He had income for 2021 as follows: Pension from former employer $39,850 Interest income from Alto National Bank 5,500 Interest income on City of Alto bonds 4,500 Dividends received from IBM stock held for over one year 2,000 Collections on annuity contract he purchased from Great Life Insurance 5,400 Social Security benefits 14,000 Rent income on townhouse 9,000 The cost of the annuity was $46,800, and Cecil was expected to receive a total of 260 monthly payments of $450. Cecil has received 22 payments through 2021. Cecils 40-year-old daughter, Sarah C. Seymour, borrowed $60,000 from Cecil on January 2, 2021. She used the money to start a new business. Cecil does not charge her interest because she cannot afford to pay it, but he does expect to collect the principal eventually. Sarah is living with Cecil until the business becomes profitable. Except for housing, Sarah provides her own support from her business and $1,600 in dividends on stocks that she inherited from her mother. Other relevant information is presented below.
Expenses on rental townhouse: -Utilities $2,800 -Maintenance 1,000 -Depreciation 2,000 -Real estate taxes 750 -Insurance 700 State income taxes paid: $3,500 County personal property taxes paid: $3,100 Payments on estimated 2021 Federal income tax: $5,900 Charitable contributions of cash to Alto Baptist Church: $7,400 Federal interest rate: 6% Sales taxes paid: $912 Compute Cecils 2021 Federal income tax payable (or refund due) and fill out the 1040 US individual income tax return
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Department of the Treasury - Internal Revenue Service 1040 19 2020 OMB No. 1545-0074 U.S. Individual Income Tax Return IRS Use Only-Do not write or staple in this space Filling Status Single Married filing jointly married filing separately (MFS) Head of household (HOH) Qualifying widowlers (Qw Check only # you checked the MFS box, enter the name of your spouse. If you checked the HOH or QW box, enter the child's name if the qualifying person is a child but not your dependent Your social security number Your first name and middle initial one bax. Last name Last name If joint return, spouse's first name and middle initial Spouse's social security number 0000 Apt. no. Presidential Election Campaign Home address (number and street). If you have a P.O. box, see Instructions. Check here if you, or your State ZIP code spouse if filing jointly, want $3 City, town, or post office. If you have a foreign address, also complete spaces below. to go to this fund. Checking a box below will not change Foreign country name Foreign province/state/county Foreign postal code your tax or refund. You Spouse At any time during 2020, did you receive, sell, send, exchange, or otherwise acquire any financial interest in any virtual currency? Yes No Standard Someone can claim: You as a dependent Your spouse as a dependent Deduction Spouse itemizes on a separate return or you were a dual-status alien Age/Blindness You Were bom before January 2, 1956 Are blind Spouse: Was born before January 2, 1956 Is blind Dependents (see instructions): (2) Social security (3) Relationship (4) if qualifies for (see instructions): If more (1) First name Last name number to you Child tax credit Credit for other dependents than four dependents, see instructions and check here 1 Wages, salaries, tips, etc. Attach Form(s) W-2. 1 Attach 2a Tax-exempt interest 2a b Taxable interest 2b Sch. Bif 3a Qualified dividends 3a required. b Ordinary dividends 3b 4a IRA distributions. 49 b Taxable amount. 4b 5a Pensions and annuities 5a b Taxable amount 5b Standard 6a Social security benefits Ba b Taxable amount. 65 Deduction for- 7 Capital gain or loss). Attach Schedule D if required. If not required, check here 7 Single or Married filing 8 Other income from Schedule 1, line 9. 8 separately, $12,400 9 Add lines 1, 2b, 3b, 4b, 5b, 6b, 7, and 8. This is your total income 9 Married filing 10 Adjustments to income: jointly or Qualifying a From Schedule 1, line 22 10a widow(er). b $24.800 Charitable contributions if you take the standard deduction. See instructions 10b Head of Add lines 10a and 10b. These are your total adjustments to Income 10c household, 11 Subtract line 10c from line 9. This is your adjusted gross income $18,650 11 If you checked 12 Standard deduction or itemized deductions (from Schedule A) 12 any box under Standard 13 Qualified business income deduction. Attach Form 8995 or Form 8995-A 13 Deduction, 14 Add lines 12 and 13. see instructions 14 15 Taxable income. Subtract line 14 from line 11. If zero or less, enter-0- 15 For Disclosure, Privacy Act, and Paperwork Reduction Act Notice, see separate instructions. Cal. No. 11320B Form 1040 (2020) + . Page 2 Form 1040 (2020) 2 0 4972 30 16 16 Tax (see instructions). Check if any from Form(s): 1 8814 17 17 Amount from Schedule 2, line 3 18 18 Add lines 16 and 17 19 19 Child tax credit or credit for other dependents 20 20 Amount from Schedule 3, line 7 21 21 Add lines 19 and 20. 22 22 Subtract line 21 from line 18. If zero or less, enter -0- 23 23 Other taxes, including self-employment tax, from Schedule 2, line 10 24 24 Add lines 22 and 23. This is your total tax 25 Federal income tax withheld from: 25a a Form(s) W-2 25b b Form(s) 1099 25c c Other forms (see instructions) 25d d Add lines 25a through 25c. 26 26 2020 estimated tax payments and amount applied from 2019 return If you have a qualifying child, 27 27 Eamed income credit (EIC). ... attach Sch. EIC. If you have 28 28 Additional child tax credit. Attach Schedule 8812 nontaxable 29 American opportunity credit from Form 8863, line 8 29 combat pay, see instructions.) 30 Recovery rebate credit. See instructions. 30 31 Amount from Schedule 3, line 13 31 32 Add lines 27 through 31. These are your total other payments and refundable credits 32 33 Add lines 25d, 26, and 32. These are your total payments 33 34 If line 33 is more than fine 24, subtract line 24 from line 33. This is the amount you overpaid Refund 34 35a Amount of line 34 you want refunded to you. If Form 8888 is attached, check here 35a Direct deposit? Routing number See instructions. Account number Type: Checking Savings 36 Amount of line 34 you want applied to your 2021 estimated tax. 36 Amount 37 Subtract line 33 from line 24. This is the amount you owe now. 37 You Owe Note: Schedule H and Schedule SE filers, line 37 may not represent all of the taxes you owe for For details on how to pay, see 2020. See Schedule 3, line 12e, and its instructions for details. Instructions. 38 Estimated tax penalty (see instructions) 38 Third Party Do you want to allow another person to discuss this retum with the IRS? See Designee instructions Yes. Complete below. No Designee's Phone Personal identification name number (PIN) Sign Under penalties of perjury, I declare that I have examined this return and accompanying schedules and statements, and to the best of my knowledge and belief, they are true, correct, and complete. Declaration of preparer (other than taxpayer) is based on all information of which preparer has any knowledge. Here Your signature Date Your occupation If the IRS sent you an identity Protection PIN, enter it here Joint return? (see inst.) See Instructions. Spouse's signature. If a joint retum, both must sign. Date Spouse's occupation Keep a copy for If the IRS sent your spouse an your records. Identity Protection PIN, enter it here (see Inst.) Phone no. Email address Preparer's name Paid Preparer's signature Date PTIN Check if: Preparer Self-employed Firm's name Use Only Phone no. Firm's address Firm's EIN Go to www.irs.gov/Form 1040 for instructions and the latest information. Form 1040 (2020) P no. Department of the Treasury - Internal Revenue Service 1040 19 2020 OMB No. 1545-0074 U.S. Individual Income Tax Return IRS Use Only-Do not write or staple in this space Filling Status Single Married filing jointly married filing separately (MFS) Head of household (HOH) Qualifying widowlers (Qw Check only # you checked the MFS box, enter the name of your spouse. If you checked the HOH or QW box, enter the child's name if the qualifying person is a child but not your dependent Your social security number Your first name and middle initial one bax. Last name Last name If joint return, spouse's first name and middle initial Spouse's social security number 0000 Apt. no. Presidential Election Campaign Home address (number and street). If you have a P.O. box, see Instructions. Check here if you, or your State ZIP code spouse if filing jointly, want $3 City, town, or post office. If you have a foreign address, also complete spaces below. to go to this fund. Checking a box below will not change Foreign country name Foreign province/state/county Foreign postal code your tax or refund. You Spouse At any time during 2020, did you receive, sell, send, exchange, or otherwise acquire any financial interest in any virtual currency? Yes No Standard Someone can claim: You as a dependent Your spouse as a dependent Deduction Spouse itemizes on a separate return or you were a dual-status alien Age/Blindness You Were bom before January 2, 1956 Are blind Spouse: Was born before January 2, 1956 Is blind Dependents (see instructions): (2) Social security (3) Relationship (4) if qualifies for (see instructions): If more (1) First name Last name number to you Child tax credit Credit for other dependents than four dependents, see instructions and check here 1 Wages, salaries, tips, etc. Attach Form(s) W-2. 1 Attach 2a Tax-exempt interest 2a b Taxable interest 2b Sch. Bif 3a Qualified dividends 3a required. b Ordinary dividends 3b 4a IRA distributions. 49 b Taxable amount. 4b 5a Pensions and annuities 5a b Taxable amount 5b Standard 6a Social security benefits Ba b Taxable amount. 65 Deduction for- 7 Capital gain or loss). Attach Schedule D if required. If not required, check here 7 Single or Married filing 8 Other income from Schedule 1, line 9. 8 separately, $12,400 9 Add lines 1, 2b, 3b, 4b, 5b, 6b, 7, and 8. This is your total income 9 Married filing 10 Adjustments to income: jointly or Qualifying a From Schedule 1, line 22 10a widow(er). b $24.800 Charitable contributions if you take the standard deduction. See instructions 10b Head of Add lines 10a and 10b. These are your total adjustments to Income 10c household, 11 Subtract line 10c from line 9. This is your adjusted gross income $18,650 11 If you checked 12 Standard deduction or itemized deductions (from Schedule A) 12 any box under Standard 13 Qualified business income deduction. Attach Form 8995 or Form 8995-A 13 Deduction, 14 Add lines 12 and 13. see instructions 14 15 Taxable income. Subtract line 14 from line 11. If zero or less, enter-0- 15 For Disclosure, Privacy Act, and Paperwork Reduction Act Notice, see separate instructions. Cal. No. 11320B Form 1040 (2020) + . Page 2 Form 1040 (2020) 2 0 4972 30 16 16 Tax (see instructions). Check if any from Form(s): 1 8814 17 17 Amount from Schedule 2, line 3 18 18 Add lines 16 and 17 19 19 Child tax credit or credit for other dependents 20 20 Amount from Schedule 3, line 7 21 21 Add lines 19 and 20. 22 22 Subtract line 21 from line 18. If zero or less, enter -0- 23 23 Other taxes, including self-employment tax, from Schedule 2, line 10 24 24 Add lines 22 and 23. This is your total tax 25 Federal income tax withheld from: 25a a Form(s) W-2 25b b Form(s) 1099 25c c Other forms (see instructions) 25d d Add lines 25a through 25c. 26 26 2020 estimated tax payments and amount applied from 2019 return If you have a qualifying child, 27 27 Eamed income credit (EIC). ... attach Sch. EIC. If you have 28 28 Additional child tax credit. Attach Schedule 8812 nontaxable 29 American opportunity credit from Form 8863, line 8 29 combat pay, see instructions.) 30 Recovery rebate credit. See instructions. 30 31 Amount from Schedule 3, line 13 31 32 Add lines 27 through 31. These are your total other payments and refundable credits 32 33 Add lines 25d, 26, and 32. These are your total payments 33 34 If line 33 is more than fine 24, subtract line 24 from line 33. This is the amount you overpaid Refund 34 35a Amount of line 34 you want refunded to you. If Form 8888 is attached, check here 35a Direct deposit? Routing number See instructions. Account number Type: Checking Savings 36 Amount of line 34 you want applied to your 2021 estimated tax. 36 Amount 37 Subtract line 33 from line 24. This is the amount you owe now. 37 You Owe Note: Schedule H and Schedule SE filers, line 37 may not represent all of the taxes you owe for For details on how to pay, see 2020. See Schedule 3, line 12e, and its instructions for details. Instructions. 38 Estimated tax penalty (see instructions) 38 Third Party Do you want to allow another person to discuss this retum with the IRS? See Designee instructions Yes. Complete below. No Designee's Phone Personal identification name number (PIN) Sign Under penalties of perjury, I declare that I have examined this return and accompanying schedules and statements, and to the best of my knowledge and belief, they are true, correct, and complete. Declaration of preparer (other than taxpayer) is based on all information of which preparer has any knowledge. Here Your signature Date Your occupation If the IRS sent you an identity Protection PIN, enter it here Joint return? (see inst.) See Instructions. Spouse's signature. If a joint retum, both must sign. Date Spouse's occupation Keep a copy for If the IRS sent your spouse an your records. Identity Protection PIN, enter it here (see Inst.) Phone no. Email address Preparer's name Paid Preparer's signature Date PTIN Check if: Preparer Self-employed Firm's name Use Only Phone no. Firm's address Firm's EIN Go to www.irs.gov/Form 1040 for instructions and the latest information. Form 1040 (2020) P no
