Diana and Ryan Workman were married on January 1 of last year. Diana has an eight-year-old son, Jorge, from her previous marriage. Ryan works as a computer programmer at Datafile Incorporated (DI) earning a salary of $99,000. Diana is self-employed and runs a day care center. The Workmans reported the following financial information pertaining to their activities during the current year.

1. Ryan earned a $99,000 salary for the year.
2. Ryan borrowed $12,600 from DI to purchase a car. DI charged him 2 percent interest ($252) on the loan, which Ryan paid on December 31. DI would have charged Ryan $780 if interest had been calculated at the applicable federal interest rate. Assume that tax avoidance was not a motive for the loan.
3. Diana received $2,300 in alimony and $5,100 in child support payments from her former husband. They divorced in 2016.
4. Diana won a $960 cash prize at her church-sponsored Bingo game.
5. The Workmans received $800 of interest from corporate bonds and $550 of interest from a municipal bond. Diana owned these bonds before she married Ryan.
6. The couple bought 62 shares of ABC Incorporated stock for $46 per share on July 2. The stock was worth $59 a share on December 31. The stock paid a dividend of $1 per share on December 1.
7. Dianas father passed away on April 14. She inherited cash of $56,000 from her father and his baseball card collection, valued at $2,600. As the beneficiary of her fathers life insurance policy, Diana also received $156,000.
8. The couple spent a weekend in Atlantic City in November and came home with gross gambling winnings of $1,800.
9. Ryan received $1,600 cash for reaching 10 years of continuous service at DI.
10. Ryan was hit and injured by a drunk driver while crossing a street at a crosswalk. He was unable to work for a month. He received $7,200 from his disability insurance. DI paid the premiums for Ryan, but it reported the amount of the premiums as compensation to Ryan on his year-end W-2.
11. The drunk driver who hit Ryan in part (j) was required to pay his $2,600 medical costs, $2,100 for the emotional trauma he suffered from the accident, and $6,200 for punitive damages.
12. For meeting his performance goals this year, Ryan was informed on December 27 that he would receive a $5,600 year-end bonus. DI (located in Houston, Texas) mailed Ryans bonus check from its payroll processing center (Tampa, Florida) on December 28. Ryan didnt receive the check at his home until January 2.
13. Diana is a 10 percent owner of MNO Incorporated, a Subchapter S corporation. The company reported ordinary business income for the year of $104,000. Diana acquired the MNO stock two years ago.
14. Dianas day care business collected $65,000 in revenues. In addition, customers owed her $6,000 at year-end. During the year, Diana spent $8,500 for supplies, $4,500 for utilities, $21,000 for rent, and $800 for miscellaneous expenses. One customer gave her use of his vacation home for a week (worth $5,500) in exchange for Diana allowing his child to attend the day care center free of charge. Diana accounts for her business activities using the cash method of accounting.
15. Ryans employer pays the couples annual health insurance premiums of $8,500 for a qualified plan.

2. Complete page 1 of Form 1040 through line 9 and Schedule 1 for the Workmans (for filing MFJ).

(Input all the values as positive numbers. Enter any non-financial information, (e.g. Names, Addresses, social security numbers) EXACTLY as they appear in any given information or Problem Statement. Do not skip rows, while entering in Deductions section of Form 1040 PG1.)

Ryan address is 19010 N.W. 135th Street.

Social security numbers:

Ryan: 111-22-3333

Diana: 222-33-4444

Jorge: 333-44-5555

Form 1040 Page 1.

1040 2020 Department of the Treasury - Internal Revenue Service (99) U.S. Individual Income Tax Return OMB No. 1545-0074 IRS Use Only-Do not write or staple in this space. Filing Status Single Married filing jointly Married filing separately (MFS) Head of household (HOH) Qualifying widow(er) (QW) Check only one box If 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 first name and middle initial Last name Your social security number If joint return, spouse's first name and middle initial Last name Spouse's social security number 1 1 Home address (number and street). If you have a P.O.box, see instructions. Apt. no. Presidential Election Campaign Check here if you, or your City, town, or post office. If you have a foreign address, also complete spaces below. State ZIP code spouse if filing jointly, want $3 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 born before January 2, 1956 Are blind Spouse: Was born before January 2, 1956 Is blind Dependents (see instructions): (2) Social security (3) Relationship (4) Vit 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 Wages, salaries, tips, etc. Attach Form(s) W-2 Attach 2a Tax-exempt interest. b Taxable interest Sch. Bit 3a Qualified dividends required. 3b b Ordinary dividends 4a IRA distributions. 4a b Taxable amount 5a Pensions and annuities 5a b Taxable amount Standard 6a Social security benefits. b Taxable amount 6b 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. .. separately, 9 $12,400 Add lines 1, 2b, 36, 45, 56, 66, 7, and 8. This is your total income Married filing 10 Adjustments to income: Qualifying a From Schedule 1, line 22 10a widow(er. b Charitable contributions if you take the standard deduction. See instructions 10b $24.800 Head of c Add lines 10a and 10b. These are your total adjustments to income 10c household, $18,650 11 Subtract line 10c from line 9. This is your adjusted gross income 11 If you checked 12 Standard deduction or itemized deductions (from Schedule A) Standard 13 Qualified business income deduction. Attach Form 8995 or Form 8995-A 13 Deduction, 14 Add lines 12 and 13 14 15 Taxable income. Subtract line 14 from line 11. If zero or less, enter-O- 15 For Disclosure, Privacy Act, and Paperwork Reduction Act Notice, see separate instructions. Form 1040 2020) 2b 2a 4b 5b 8 9 jointly or 12 any box under see instructions Cat. No. 11320B - SCHEDULE 1 OMB No. 1545-0074 (Form 1040) Additional Income and Adjustments to Income 2020 Department of the Treasury Attach to Form 1040, 1040-SR, or 1040-NR. Attachment Internal Revenue Service Go to www.irs.gov/ Form 10-40 for instructions and the latest information. Sequence No. 01 Name(s) shown on Form 1040, 1040-SR, or 1040-NR Your social security number Parti Additional Income 1 Taxable refunds, credits, or offsets of state and local income taxes. 1 2a Alimony received ..., 2a b Date of original divorce or separation agreement (see instructions) 3 Business income or (loss). Attach Schedule C 3 4 Other gains or losses). Attach Form 4797 . 4 5 Rental real estate, royalties, partnerships, Scorporations, trusts, etc. Attach Schedule E 5 6 Farm income or (loss). Attach Schedule F 6 7 Unemployment compensation .. 7 8 Other income. List type and amount 8 9 11 14 15 9 Combine lines 1 through 8. Enter here and on Form 1040, 1040-SR, or 1040-NR, line 8 Part II Adjustments to Income 10 Educator expenses. 10 11 Certain business expenses of reservists, performing artists, and fee-basis government officials. Attach Form 2106 12 Health savings account deduction. Attach Form 8889 12 13 Moving expenses for members of the Armed Forces. Attach Form 3903 13 14 Deductible part of self-employment tax. Attach Schedule SE 15 Self-employed SEP, SIMPLE, and qualified plans 16 Self-employed health insurance deduction 16 17 Penalty on early withdrawal of savings 17 18a Alimony paid. 18a b Recipient's SSN c Date of original divorce or separation agreement (see instructions) 19 IRA deduction 19 20 Student loan interest deduction. 21 Tuition and fees deduction. Attach Form 8917 22 Add lines 10 through 21. These are your adjustments to income. Enter here and on Form 1040, 1040-SR, or 1040-NR, line 10a 22 For Paperwork Reduction Act Notice, see your tax return instructions. Schedule 1 Form 1040) 2020 20 21 Cat No. 71470 1040 2020 Department of the Treasury - Internal Revenue Service (99) U.S. Individual Income Tax Return OMB No. 1545-0074 IRS Use Only-Do not write or staple in this space. Filing Status Single Married filing jointly Married filing separately (MFS) Head of household (HOH) Qualifying widow(er) (QW) Check only one box If 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 first name and middle initial Last name Your social security number If joint return, spouse's first name and middle initial Last name Spouse's social security number 1 1 Home address (number and street). If you have a P.O.box, see instructions. Apt. no. Presidential Election Campaign Check here if you, or your City, town, or post office. If you have a foreign address, also complete spaces below. State ZIP code spouse if filing jointly, want $3 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 born before January 2, 1956 Are blind Spouse: Was born before January 2, 1956 Is blind Dependents (see instructions): (2) Social security (3) Relationship (4) Vit 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 Wages, salaries, tips, etc. Attach Form(s) W-2 Attach 2a Tax-exempt interest. b Taxable interest Sch. Bit 3a Qualified dividends required. 3b b Ordinary dividends 4a IRA distributions. 4a b Taxable amount 5a Pensions and annuities 5a b Taxable amount Standard 6a Social security benefits. b Taxable amount 6b 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. .. separately, 9 $12,400 Add lines 1, 2b, 36, 45, 56, 66, 7, and 8. This is your total income Married filing 10 Adjustments to income: Qualifying a From Schedule 1, line 22 10a widow(er. b Charitable contributions if you take the standard deduction. See instructions 10b $24.800 Head of c Add lines 10a and 10b. These are your total adjustments to income 10c household, $18,650 11 Subtract line 10c from line 9. This is your adjusted gross income 11 If you checked 12 Standard deduction or itemized deductions (from Schedule A) Standard 13 Qualified business income deduction. Attach Form 8995 or Form 8995-A 13 Deduction, 14 Add lines 12 and 13 14 15 Taxable income. Subtract line 14 from line 11. If zero or less, enter-O- 15 For Disclosure, Privacy Act, and Paperwork Reduction Act Notice, see separate instructions. Form 1040 2020) 2b 2a 4b 5b 8 9 jointly or 12 any box under see instructions Cat. No. 11320B - SCHEDULE 1 OMB No. 1545-0074 (Form 1040) Additional Income and Adjustments to Income 2020 Department of the Treasury Attach to Form 1040, 1040-SR, or 1040-NR. Attachment Internal Revenue Service Go to www.irs.gov/ Form 10-40 for instructions and the latest information. Sequence No. 01 Name(s) shown on Form 1040, 1040-SR, or 1040-NR Your social security number Parti Additional Income 1 Taxable refunds, credits, or offsets of state and local income taxes. 1 2a Alimony received ..., 2a b Date of original divorce or separation agreement (see instructions) 3 Business income or (loss). Attach Schedule C 3 4 Other gains or losses). Attach Form 4797 . 4 5 Rental real estate, royalties, partnerships, Scorporations, trusts, etc. Attach Schedule E 5 6 Farm income or (loss). Attach Schedule F 6 7 Unemployment compensation .. 7 8 Other income. List type and amount 8 9 11 14 15 9 Combine lines 1 through 8. Enter here and on Form 1040, 1040-SR, or 1040-NR, line 8 Part II Adjustments to Income 10 Educator expenses. 10 11 Certain business expenses of reservists, performing artists, and fee-basis government officials. Attach Form 2106 12 Health savings account deduction. Attach Form 8889 12 13 Moving expenses for members of the Armed Forces. Attach Form 3903 13 14 Deductible part of self-employment tax. Attach Schedule SE 15 Self-employed SEP, SIMPLE, and qualified plans 16 Self-employed health insurance deduction 16 17 Penalty on early withdrawal of savings 17 18a Alimony paid. 18a b Recipient's SSN c Date of original divorce or separation agreement (see instructions) 19 IRA deduction 19 20 Student loan interest deduction. 21 Tuition and fees deduction. Attach Form 8917 22 Add lines 10 through 21. These are your adjustments to income. Enter here and on Form 1040, 1040-SR, or 1040-NR, line 10a 22 For Paperwork Reduction Act Notice, see your tax return instructions. Schedule 1 Form 1040) 2020 20 21 Cat No. 71470