Question
Derrick and Ani Jones are married taxpayers, filing jointly, and have a son named Jackson. They live at 474 Rustic Drive, Spokane, WA 99201. Ani
Derrick and Ani Jones are married taxpayers, filing jointly, and have a son named Jackson. They live at 474 Rustic Drive, Spokane, WA 99201. Ani works as the director of information systems at Washington Community College District (WCCD). Derrick is a stay-at-home dad. Their SSNs are Derrick, 412-34-5670; Ani, 412-34-5671; and Jackson, 412-34-5672. Their birth dates are as follows: Derrick, June 7, 1981; Ani, March 20, 1982; and Jackson, October 10, 2014. The Joneses own their home and paid $15,000 in mortgage interest during the year to Chase Bank and property taxes of $3,200. Assume they have no other deductible expenses. The Form W-2 Ani received from WCCD contained the following information:
Wages (box 1) = | $ 79,002.50 |
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Federal W/H (box 2) = | $ 7,000.14 |
Social security wages (box 3) = | $ 79,002.50 |
Social security W/H (box 4) = | $ 4,898.16 |
Medicare wages (box 5) = | $ 79,002.50 |
Medicare W/H (box 6) = | $ 1,145.54 |
In addition, the Joneses own a small, four-unit rental at 12345 Rainbow Way, Sultan, WA 98294. The rental was purchased and placed in service on July 1, 2008, and was rented for the entire year. The following income and expense information relates to the rental activity. For the purpose of this return problem, do not consider passive activity rules or limitations.
Rental income | $ 24,000 |
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Real estate taxes | 2,000 |
State sales taxes | 1,349 |
Utilities | 1,500 |
Mortgage interest | 3,800 |
Depreciation | 7,200 |
Repairs and maintenance | 1,300 |
Required:
Prepare the Joneses federal tax return for 2021. Use Form 1040, Schedule 1, Schedule E, Schedule 8812, and Form 8995. Assume they do not qualify for any credits other than the child care credit. If using tax software, the software will calculate Child Tax Credit automatically. For any missing information, make reasonable assumptions. The net rental income qualifies for the 20 percent qualified business income deduction. Use the appropriate Tax Tables or Tax Rate Schedules.
Note: List the names of the taxpayers in the order in which they appear in the problem. Input all the values as positive numbers. Instructions can be found on certain cells within the forms. Round your final answers to the nearest whole dollar amount. Do not skip rows, while entering in the Dependents section of Form 1040 PG1.
Please show me how the forms will look: 1040, Schedule 1, Schedule E, Schedule 8812, Form 8995
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