Question
Create a Form 1040 Federal Income Tax return for 2020 tax year using the information below. On a complete tax return, you are expected to
Create a Form 1040 Federal Income Tax return for 2020 tax year using the information below.
On a complete tax return, you are expected to have the following forms completed:
Form 1040
Schedule 1
Schedule 3
Schedule B
Schedule C
Schedule SE
SPECIAL INSTRUCTION: For line 16, Form 1040, please document or explain how you found the tax amount and what specific page in Instructions Form 1040 where you pulled the figure that's on line 16. And for Form 1040, line 19, please explain how you arrived at the credit and what was the basis for the credit (if it applies).
The Solos' Tax Return 2020 Tax Return Information
In 2020, Han (SSN 000-11-1111) and Leia (SSN 000-22-2222) were married for the entire year. They have one child, Ben Solo (SSN 000-33-3333), who was age 19 at the end of 2020 who is also a full time student at Death Star University majoring where his parents provided more than 50% of his support. Ben Solo was unmarried at the end of 2020 and reported no income for the year. The Solos will not claim the Education Credit for Ben Solo. The Solos also had their 40 year old friend, Chewbacca, living with them for 10 months out of the year since getting laid off as a copilot from his aviation job. The Solos provided more than of his support. Chewbacca made $1,000 in 2020 in W2 wages.
The Solos' residential and mailing address is: 2000 Millenium Falcon Way, Mustafar, MD 24629
The following income and itemized deductions were incurred during tax year 2020:
Taxpayer | Employer | W-2 Income | Federal Taxes W/H |
Han Solo | Jabba's Hut | $100,000 | $21,000 |
Leia Solo | Wookie, LLC | $5,500 | $1,500 |
Taxpayer | Payor | 1099-Int (interest income) | Federal Taxes W/H |
Leia Solo | Imperial Savings | $2,000 | $0 |
Leia Solo | Skywalker Savings | $7,000 (from municipal bonds) | $0 |
The Solos do not hold any foreign financial assets, trust or bank accounts in a foreign county.
Itemized Expenses | Itemized Deductions |
Mortgage Interest | $12,000 |
Property Taxes | $5,000 |
The standard deduction for 2020 is $24,800. Remember, you can only claim either the higher of itemized deductions or the standard.
Leia Solo's also reported Self Employment income from Uber. Leia drives her car for both business and personal use. Here is the following info:
Gross Receipts | $10,000 |
Insurance | $350 (business portion) |
Car Repairs | $450 (business portion) |
Business License | $120 |
Business Usage of Cell Phone | $200 |
Commuting Miles | Business Miles | Total Miles Driven |
7,000 | 5,000 | 12,000 |
Since Leia was not consistently performing as an Uber driver for the year, she has elected to NOT claim the Qualified Business Income Deduction (Form 8995). She will not elect to depreciate her vehicle since she will be claiming mileage.
Leia also made estimated Federal tax payments totaling $1,000 for tax year 2020.
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