CUMULATIVE PROBLEM 1 CHAPTERS 14 Use the following information to prepare Erica Hansen's tax return. Use Form 1040A, Schedule EIC, Schedule M, Form 8812, and Form 8863. Th is problem is suitable for manual preparation or computer software application. Erica L. Hansen (SSN 376-38-4930), age 42, is a single parent with three children. She resides at 19 Sunset Road, Normal, Illinois 61761. She chooses to support the presidential campaign fund. Her household includes Randall L. Hansen, her 19-year-old son (SSN 369-62-3418), Tiff any A. Hansen, her 12-year-old daughter (SSN 396-30-6439), and Donna M. Hansen, her 14-year-old daughter (SSN 653-29-8177). Erica provides over half of the support of each child. Donna has no income of her own, but Randall earns $4,200 during the year delivering papers and mowing lawns. All children lived in the household for 12 months. Erica works as an offi ce manager for Universal Development Corporation. Information from her W-2, as well as other relevant information follows. Gross wages $34,500 Social security tax withheld 2,139 Medicare tax withheld 500 Federal income tax withheld 0 State income tax withheld 819 Advanced EIC received 1,800 Interest received: First Federal Savings Bank $775 Olympic Savingscertifi cate of deposit cashed in 175 State of Maryland bonds 300 Dividends received: Dividend on life insurance policy with Country Farm Insurance Company $ 20 Randall, a freshman, is a full-time student at Heartland College in Normal, Illinois. Erica pays qualifi ed education expenses during the year of $3,000. Erica is a participant in an employer- sponsored retirement plan. However, she wants to make the largest possible deductible contribu- tion to her traditional IRA. If Erica has overpaid her taxes, she prefers to receive a refund. She signs and dates her return on April 5, 2010. EIC Calculation: Look up the amount in the EIC Tables for both earned income (Form 1040A, line 7) and AGI (Form 1040A, line 22). Th e smaller of these two amounts is the EIC reported on Form 1040A (line 41a). Additional Child Tax Credit: Enter on Form 8812 (line 1) $1,000 for each qualifying child.