***Everything should be calculated using 2021 numbers!

Required information (The following information applies to the questions displayed below.] John and Sandy Ferguson got married eight years ago and have a seven-year-old daughter, Samantha. In 2021, John worked as a computer technician at a local university earning a salary of $154,300, and Sandy worked part time as a receptionist for a law firm earning a salary of $31,300. John also does some Web design work on the side and reported revenues of $6,300 and associated expenses of $1,900. The Fergusons received $1,260 in qualified dividends and a $315 refund of their state income taxes. The Fergusons always itemize their deductions, and their itemized deductions were well over the standard deduction amount last year. Assume the Fergusons did not receive an advance payment for the 2021 individual recovery credit because they are not eligible for the credit. Use Exhibit 8-10, Tax Rate Schedule, Dividends and Capital Gains Tax Rates, 2021 AMT exemption for reference. The Fergusons reported making the following payments during the year: . State income taxes of $4,975. Federal tax withholding of $21,000. Alimony payments to John's former wife of $11,150 (divorced 12/31/2014). Child support payments for John's child with his former wife of $4,330. $12,430 of real property taxes. Sandy was reimbursed $715 for employee business expenses she incurred. She was required to provide documentation for her expenses to her employer. $3,600 to Kid Care day care center for Samantha's care while John and Sandy worked. $16,300 interest on their home mortgage ($400,000 acquisition debt). $3,345 interest on a $44,600 home-equity loan. They used the loan to pay for a family vacation and new car. $16,150 cash charitable contributions to qualified charities. Donation of used furniture to Goodwill. The furniture had a fair market value of $630 and cost $3,150. O . Complete pages 1 and 2, Schedule 1, Schedule 2, and Schedule 3 of Form 1040 and Form 6251 for John and Sandy. John and Sandy Ferguson's address is 19010 N.W. 135th Street, Miami, FL 33054. Social security numbers: John (DOB 11/07/1970): 111-11-1111 Sandy (DOB 6/24/1972): 222-22-2222 Samantha (DOB 9/30/2016): 333-33-3333 Alimony recipient: 555-55-5555 (Input all the values as positive numbers. Round your intermediate calculations and final answers to the nearest whole dollar. Use 2021 tax rules regardless of year on tax form.) 1040 for a couple Married Filing Jointly with one dependent. 1040 PG 1 1040 PG 2 Schedule 1 Schedule 2 Schedule 3 6251 PG 1 Form 1040 Page 1 and 2. Department of the Treasury- Form Internal Revenue Service (99) 1040 U.S. Individual 2020 OMB No. 1545-0074 IRS Use OnlyDo not write or staple in this space. Income Tax Return Married filing Filing Status Single Married filing separately (MFS) Head of household (HOH) Qualifying widow(er) (QW) jointly Check only 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 one box. 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 Home address (number and street). If you have a P.O. box, see instructions. Apt. no. Presidential Election Campaign City, town, or post office. If you have a foreign address, also complete spaces below. State ZIP code Check here if you, or your spouse if filing jointly, want $3 to go to this fund. Checking a box below will not change your tax or refund. necking a box below will not change a your tax or refund. Foreign country name Foreign province/state/county Foreign postal code You Spouse Yes No At any time during 2020, did you receive, sell, send, exchange, or otherwise acquire any financial interest in any virtual currency? Someone can Standard You as a dependent Your spouse as a dependent claim: 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 number (3) Relationship to you (4) vif qualifies for (see instructions): (1) First name Last name Child tax credit Credit for other dependents If more than four dependents, see instructions and check here! 1 1 Wages, salaries, tips, etc. Attach Form(s) W-2 2a Tax-exempt interest Attach Sch. B if 2a b Taxable interest. 2b 1 Wages, salaries, tips, etc. Attach Form(s) W-2 1 2a Tax-exempt interest 2a b Taxable interest. 2b Attach Sch. B if required. 3a Qualified dividends b Ordinary dividends. 3b 4a IRA distributions 4a b Taxable amount 4b 5a Pensions and annuities 5a b Taxable amount 5b 6a Social security benefits b Taxable amount 6b 7 8 9 10a 7 Capital gain or (loss). Amount. Standard Deduction for- 8 Other income from Schedule 1, line 9 Single or Married filing separately, 9 Add lines 1, 2b, 3b, 4b, 5b, 6b, 7, and 8. This is your total income $12,400 Married filing 10 Adjustments to income: jointly or Qualifying a From Schedule 1, line 22 widow(er), $24,800 b Charitable contributions if you take the standard deduction. See instruction Head of household, c Add lines 10a and 10b. These are your total adjustments to income $18,650 If you checked 11 Subtract line 10c from line 9. This is your adjusted gross income any box under 12 Standard deduction or itemized deductions (from Schedule A) Standard Deduction, 13 Qualified business income deduction. Attach Form 8995 or Form 8995-A see instructions. 14 Add lines 12 and 13 10b 10c 11 12 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. Cat. No. 11320B Form 1040 (2020) THIS FORM IS A SIMULATION OF AN OFFICIAL U.S. TAX FORM. IT IS NOT THE OFFICIAL FORM ITSELF. DO NOT USE THIS FORM FOR TAX FILINGS OR FOR ANY PURPOSE OTHER THAN EDUCATIONAL. 2021 McGraw-Hill Education. Form 1040 Page 1 and 2. Form 1040 (2020) Page 2 16 Tax (see instructions). Amount. 1 8814 2 4972 3 16 17 Amount from Schedule 2, line 3... 17 18 Add lines 16 and 17. 18 19 Child tax credit or credit for other dependents 19 20 Amount from Schedule 3, line 7 20 21 Add lines 19 and 20 21 22 Subtract line 21 from line 18. If zero or less, enter -0- 22 23 23 Other taxes, including self-employment tax, from Schedule 2, line 10 24 Add lines 22 and 23. This is your total tax 24 25 Federal income tax withheld from: 25a 25b 25C 25d a Form(s) W-2 b Form(s) 1099 c Other forms (see instructions) d Add lines 25a through 250 If you have a qualifying 26 2020 estimated tax payments and amount applied from 2019 return. child, attach Sch. EIC 27 Earned income credit (EIC) If you have 26 27 27 Sch. EIC 27 Earned income credit (EIC) If you have nontaxable 28 Additional child tax credit. Attach Schedule 8812 combat pay, see 29 American opportunity credit from Form 8863, line 8. instructions. 30 Recovery rebate credit. See instructions 28 29 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 Refund 34 If line 33 is more than line 24, subtract line 24 from line 33. This is the amount you overpaid 34 35a Amount of line 34 you want refunded to you. 35a 2,253 b Routing number c Type: Savings Checking Direct deposit? See instructions. d Account number 36 Amount of line 34 you want applied to your 2021 estimated tax 36 Amount You Owe 37 Subtract line 33 from line 24. This is the amount you owe now 37 Note: Schedule H and Schedule SE filers, line 37 may not represent all of the taxes you owe for 2020. See Schedule 3, line 12e, and its instructions for details 38 Estimated tax penalty (see instructions) 38 For details on how to pay, see instructions. Third For details on how to 38 Estimated tax penalty (see instructions) 38 pay, see instructions. Third Do you want to allow another person to discuss this return with the IRS? See Party instructions No Yes. Complete below. Designee Designee's Personal identification Phone no. 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 Here knowledge. Joint If the IRS sent you an Identity Your signature Date Your occupation return? Protection PIN, enter it here See instructions. (see inst.) Keep a If the IRS sent your spouse an Spouse's signature. If a joint return, both must sign. Date Spouse's occupation Identity Protection PIN, enter it here your records. (see inst.) copy for Phone no. Email address Preparer's name Preparer's signature Date PTIN Check if: Paid Preparer Self-employed Use Firm's name Phone no. Only Firm's address Firm's EIN Go to www.irs.gov/Form 1040 for instructions and the latest information. Form 1040 (2020) THIS FORM IS A SIMULATION OF AN OFFICIAL U.S. TAX FORM. IT IS NOT THE OFFICIAL FORM ITSELF. DO NOT USE THIS FORM FOR TAX FILINGS OR FOR ANY PURPOSE OTHER THAN EDUCATIONAL. 2021 McGraw-Hill Education. 1040 PG 1 1040 PG 2 Schedule 1 Schedule 2 Schedule 3 6251 PG 1 Form 1040 Schedule 1. OMB No. 1545-0074 SCHEDULE 1 (Form 1040) Additional Income and Adjustments to Income 2020 Attachment Sequence No. 01 Department of the Treasury Attach to Form 1040, 1040-SR, or 1040-NR. Internal Revenue Service Go to www.irs.gov/Form1040 for instructions and the latest information. 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 4 Other gains or (losses). Attach Form 4797 Rental real estate, royalties, partnerships, S corporations, trusts, etc. Attach Schedule E 5 5 6 6 Farm income or (loss). Attach Schedule F Unemployment compensation 7 7 8 Other income. Amount. 8 8 Other income. Amount. 8 9 9 Combine lines 1 through 8. Enter here and on Form 1040, 1040-SR, or 1040-NR, line 8 Adjustments to Income Part II 10 Educator expenses 10 11 Certain business expenses of reservists, performing artists, and fee-basis government officials. Attach Form 2106 11 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 14 15 15 Self-employed SEP, SIMPLE, and qualified plans Self-employed health insurance deduction 16 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 20 21 Tuition and fees deduction. Attach Form 8917 21 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. Cat. No. 71479F Schedule 1 (Form 1040)2020 Form 1040 Schedule 2. OMB No. 1545-0074 SCHEDULE 2 Additional Taxes (Form 1040) Department of the Treasury Attach to Form 1040, 1040-SR, or 1040-NR. Internal Revenue Service Go to www.irs.gov/Form 1040 for instructions and the latest information. Name(s) shown on Form 1040, 1040-SR, or 1040-NR 2020 Attachment Sequence No. 02 Your social security number Part 1 Tax 1 Alternative minimum tax. Attach Form 6251 1 2 Excess advance premium tax credit repayment. Attach Form 8962 2 3 Add lines 1 and 2. Enter here and on Form 1040, 1040-SR, or 1040-NR, line 17 3 Part II Other Taxes 4 Self-employment tax. Attach Schedule SE 4 5 Unreported social security and Medicare tax from Form: a 4137 b 8919 5 6 Additional tax on IRAs, other qualified retirement plans, and other tax-favored accounts. Attach Form 5329 if required 6 7a Household employment taxes. Attach Schedule H 7a b Repayment of first-time homebuyer credit from Form 5405. Attach Form 5405 if required 7b 8 Taxes from: a Form 8959 b Form 8960 8 c Instructions; enter code(s) 9 Section 965 net tax liability installment from Form 965-A 9 10 Add lines 4 through 8. These are your total other taxes. Enter here and on Form 1040 or 1040-SR, line 23, or Form 1040-NR, 10 line 23b For Paperwork Reduction Act Notice, see your tax return instructions. Cat. No. 71478U Schedule 2 (Form 1040) 2020 THIS FORM IS A SIMULATION OF AN OFFICIAL U.S. TAX FORM. IT IS NOT THE OFFICIAL FORM ITSELF. DO NOT USE THIS FORM FOR TAX FILINGS OR FOR ANY PURPOSE OTHER THAN EDUCATIONAL. 2021 McGraw-Hill Education. > 1040 PG 1 1040 PG 2 Schedule 1 Schedule 2 Schedule 3 6251 PG 1 Form 1040 Schedule 3. Additional Credits and Payments OMB No. 1545-0074 SCHEDULE 3 (Form 1040) Department of the Treasury Internal Revenue Service Name(s) shown on Form 1040 or 1040-SR 2020 Attach to Form 1040 or 1040-SR. Go to www.irs.gov/Form 1040 for instructions and the latest information. Attachment Sequence No. 03 Your social security number Parti Nonrefundable Credits 1 Foreign tax credit. Attach Form 1116 if required 1 2 Credit for child and dependent care expenses. Attach Form 2441 2 3 Education credits from Form 8863, line 19 3 4 Retirement savings contributions credit. Attach Form 8880 4 5 Residential energy credits. Attach Form 5695 5 6 Other credits from Form: a 3800 b 8801 6 7 Add lines 1 through 6. Enter here and on Form 1040, 1040-SR, or 1040-NR, line 20 7 Part II Other Payments and Refundable Credits Part II Other Payments and Refundable Credits 8 Net premium tax credit. Attach Form 8962 8 9 9 Amount paid with request for extension to file (see instructions) 10 Excess social security and tier 1 RRTA tax withheld 10 11 Credit for federal tax on fuels. Attach Form 4136 11 12 Other payments or refundable credits: a Form 2439 12a b Qualified sick and family leave credits from Schedule(s) H and Form(s) 7202 12b c Health coverage tax credit from Form 8885 12c d Other: 12d e Deferral for certain Schedule H or SE filers (see instructions) 12e f Add lines 12a through 12e 12f 13 Add lines 8 through 12f. Enter here and on Form 1040, 1040-SR, or 1040-NR, line 31 13 For Paperwork Reduction Act Notice, see your tax return instructions. Cat. No. 71480G Schedule 3 (Form 1040) 2020 THIS FORM IS A SIMULATION OF AN OFFICIAL U.S. TAX FORM. IT IS NOT THE OFFICIAL FORM ITSELF. DO NOT USE THIS FORM FOR TAX FILINGS OR FOR ANY PURPOSE OTHER THAN EDUCATIONAL. 2021 McGraw-Hill Education. Form 6251 Page 1 and 2. Form 6251 Alternative Minimum Tax- Individuals OMB No. 1545-0074 2020 Department of the Treasury Go to www.irs.gov/Form 6251 for instructions and the latest information. Internal Revenue Service (99) Attach to Form 1040, 1040-SR, or 1040-NR. Attachment Sequence No. 32 Name(s) shown on Form 1040, 1040-SR, or 1040-NR Your social security number John and Sandy Ferguson Alternative Minimum Taxable Part| (See instructions for how to complete each line.) Income 1 Enter the amount from Form 1040 or 1040-SR, line 15, if more than zero. If Form 1040 or 1040-SR, line 15, is zero, subtract lines 12 and 13 of Form 1040 or 1040-SR from line 11 of Form 1040 or 1040-SR and enter the result here. (If less than zero, enter as a negative amount.) 1 2 a If filing Schedule A (Form 1040) enter the taxes from Schedule A, line 7; otherwise, enter the amount from Form 1040 or 1040-SR, line 12 2a b Tax refund from Schedule 1 (Form 1040), line 1 or line 8 2b Investment interest expense (difference between regular tax and AMT) 2c d Depletion (Difference between regular tax and AMT) 2d e Net operating loss deduction from Schedule 1 (Form 1040), line 8. Enter as a positive amount 2e f Alternative tax net operating loss deduction. 2f g Interest from specified private activity bonds exempt from the regular tax 2g h Qualified small business stock, see instructions 2h i Exercise of incentive stock options (excess of AMT income over regular tax income) 2i j Estates and trusts (amount from Schedule K-1 (Form 1041), box 12, code A) 2j k Disposition of property (Difference between AMT and regular tax gain or loss) 2k 2j 2k 21 2m 2n 20 Estates and trusts (amount from Schedule K-1 (Form 1041), box 12, code A) k Disposition of property (Difference between AMT and regular tax gain or loss) I Depreciation on assets placed in service after 1986 (Difference between regular tax and AMT) m Passive activities (difference between AMT and regular tax income or loss) n Loss limitations (difference between AMT and regular tax income or loss) o Circulation costs (difference between regular tax and AMT) p Long-term contracts (difference between AMT and regular tax income) q Mining costs (difference between regular tax and AMT) Research and experimental costs (difference between regular tax and AMT) Income from certain installment sales before January 1, 1987 Intangible drilling costs preference Other adjustments, including income-based related adjustments Alternative minimum taxable income. Combine lines 1 through 3. (If married filing separately and line 4 is more than $745,200, see instructions.) 2p 29 r 2r S 2s t 2t 3 4 Part II Alternative Minimum Tax (AMT) Exemption. IF your filing status is... AND line 4 is not over... THEN enter on line 5... Single or head of household $ 518,400 $ 72,900 } 5 Married filing jointly or 1,036,800 113,400 qualifying widow(er) Married filing separately 518,400 56,700 If line 4 is over the amount shown above for your filing status, see instructions. Subtract line 5 from line 4. If more than zero, go to line 7. If zero or less, enter -O- here and on lines 7, 9, and 11, and go to line 10 If you are filing Form 2555. see instructions for the amount to enter. 6 If line 4 is over the amount shown above for your filing status, see instructions. Subtract line 5 from line 4. If more than zero, go to line 7. If zero or less, enter-O- here and on lines 7, 9, and 11, and go to line 10 If you are filing Form 2555, see instructions for the amount to enter. 6 6 7 If you reported capital gain distributions directly on Form 1040 or 1040-SR, line 7; you reported qualified dividends on Form 1040 or 1040-SR, line 3a; or you had a gain on both lines 15 and 16 of Schedule D (Form 1040) (as refigured for the AMT, if necessary), complete 7 Part III on the back and enter the amount from line 40 here. All others: If line 6 is $197,900 or less ($98,950 or less if married filing separately), multiply line 6 by 26% (0.26). Otherwise, multiply line 6 by 28% (0.28) and subtract $3,958 ($1,979 if married filing separately) from the result Otherwise, multiply line 6 by 28% (0.28) and subtract $3,896 ($1,948 if married filing separately) from the result. 8 Alternative minimum tax foreign tax credit (see instructions) 8 9 Tentative minimum tax. Subtract line 8 from line 7 9 10 Add Form 1040 or 1040-SR, line 16 (minus any tax from Form 4972), and Schedule 2 (Form 1040), line 2. Subtract Subtract from the result any foreign tax credit from Schedule 3 (Form 1040), line 1. If you used Schedule J to figure your tax on Form 1040 or 1040-SR, line 16, refigure that tax without using Schedule J before completing this line (see instructions) 10 11 AMT. Subtract line 10 from line 9. If zero or less, enter -O-. Enter here and on Schedule 2 (Form 1040), line 1 11 For Paperwork Reduction Act Notice, see your tax return Cat. No. 13600G instructions. Form 6251 (2020) THIS FORM IS A SIMULATION OF AN OFFICIAL U.S. TAX FORM. IT IS NOT THE OFFICIAL FORM ITSELF. DO NOT USE THIS FORM FOR TAX FILINGS OR FOR ANY PURPOSE OTHER THAN EDUCATIONAL. 2021 McGraw-Hill Education. This project is more comprehensive than the other tax return projects and entails completing Form 1040, page 1; Form 1040, page 2; Schedule 1; Schedule 2; Schedule 3; and Form 6251, page 1, for a married couple. Be sure to complete all six forms which are identified in boxes at the top of the Form 1040. Click on each box to access the respective form. Also be sure to complete all relevant lines and boxes in the forms including filling in information such as filing status, name, social security numbers, etc., or Connect will state your forms are incomplete, and you will lose points. A filled-in Form 1040, page 1 and 2, and Schedule 1 can be found in Chapter 4 in your textbook on pages 4-25 and 4-26. A filled-in Form 1040, page 2, is also on page 8-40 in Chapter 8 in your textbook. I recommend you complete this project after you have reviewed the Chapter 8 - Part 2 PowerPoint slides (or read the Chapter 8 material). Specific to this project, you should know the following: 1. You do not need to check the "Presidential Election Campaign" box because it is assumed the taxpayers do not want to have $3 of their tax go toward that fund. 2. You also do not need to check any box regarding their virtual currency holdings. Hint: John is an employee as well as self-employed. His net business income would be reported on Schedule C, but you are not required to complete a Schedule C for this project. A filled-in Schedule 1 showing how items related to a sole proprietor are reported on Schedule 1 can be reviewed on page 6-11 in Chapter 6 of your textbook. 5. The date of John's divorce from his former wife is NOT 12/31/2011; it is 12/31/2014. 4. You will need to determine the total amount of itemized deductions even though there is no Schedule A to complete, so you will need to do that separately. To do so, you may want to review the filled-in Schedule A found on page 6-24 in Chapter 6 of your textbook. The total amount of itemized deductions you calculate should be entered on Form 1040, page 1, as one amount. 5. You will need to calculate the taxpayer's tax using the tax rate schedules that you can access within the project. The amount you determine should be entered on line 16 but none of the boxes on line 16 should be checked. 6. You may need a more comprehensive Child and Dependent Care Percentages Table than the one included in Connect. If so, use 24% as the correct percentage. 7. You will need to determine whether the taxpayers are required to pay the alternative minimum tax (AMT), which is done by completing Form 6251. We are not covering this topic in class (or on the final exam), so completing Form 6251 will give you a brief introduction to the alternative minimum tax system. If you would like to understand the AMT before you complete the project, it is discussed on pages 8-7 through 8-12 in Chapter 8 of your textbook. As Chapter 8 discusses, taxpayers are required to pay the greater of their regular tax liability (using the rules discussed in ACC 311) or their alternative minimum tax liability (rules covered in Chapter 8). Briefly, the AMT is an alternative tax base meant to more closely reflect economic income than the regular income tax base." It "ensures that taxpayers generating income pay some minimum amount of income tax each year." Chapter 8 states, To compute their AMT, taxpayers first compute their regular income tax liability. Then they compute the AMT base and multiply the base by the applicable alternative tax rate. They must pay the AMT only when the tax on the AMT base (called the Tentative Minimum Tax (TMT) exceeds their regular tax liability." Form 6251 is used to determine the taxpayer's AMT base and any AMT liability. First, several plus and minus" adjustments are made to the taxpayer's regular taxable income (lines 1-3 on Form 6251) to calculate the taxpayers' alternative minimum taxable income (AMTI) (line 4). The annual AMT exemption (line 5) is then subtracted from the AMTI to determine the AMT tax base (line 6). That tax base is multiplied by the AMT rate to determine the taxpayers' tentative minimum tax (TMT) (lines 7 and 9). The taxpayer's' regular income tax liability (line 10) is then subtracted from the taxpayer's TMT, and if the result is positive, the taxpayer has an alternative minimum tax liability due (AMT liability) (line 11) which is paid in addition to the taxpayer's regular income tax liability. If the taxpayer's regular income tax liability is greater than the TMT, no additional AMT liability is due. These calculations are all made on Form 6251. When you complete this form, the following information will be helpful: a. Lines 1 through 2t: For the amounts requested, enter your amounts from your tax return forms (hint: the majority of these lines will be blank). b. Line 2a: Enter the amount you included in your total itemized deductions for the taxes itemized deduction (i.e., the amount you would have reported on Schedule A, line 7, if you had completed a Schedule A for this project). A filled in Schedule A can be found on page 6-24 in Chapter 6 in your textbook. C. Line 3: There are no other adjustments, so leave this line blank. d. Line 5: Enter the 2021 alternative minimum tax exemption amount of $114,600 (do NOT enter what the Form says to enter, $113,400 (the 2020 exemption amount)). e. Line 7: To make the required tax calculation:_41) Subtract the amount of their qualified dividend income from the amount you entered on Form 6251, line 6, and multiply that resulting amount by 26%; (2) multiply the taxpayers' amount of qualified dividend income by 15%; (3) add these two amounts together; and (4) enter the total on line 7 and on line 9. Leave line 8 blank. f. Line 10: Enter the amount from your Form 1040, line 16, no adjustments are needed to that amount. However, if Connect marks your amount as incorrect, use $21,177. g. Line 11: Make the calculation requested using the amount you report on line 10. Required information (The following information applies to the questions displayed below.] John and Sandy Ferguson got married eight years ago and have a seven-year-old daughter, Samantha. In 2021, John worked as a computer technician at a local university earning a salary of $154,300, and Sandy worked part time as a receptionist for a law firm earning a salary of $31,300. John also does some Web design work on the side and reported revenues of $6,300 and associated expenses of $1,900. The Fergusons received $1,260 in qualified dividends and a $315 refund of their state income taxes. The Fergusons always itemize their deductions, and their itemized deductions were well over the standard deduction amount last year. Assume the Fergusons did not receive an advance payment for the 2021 individual recovery credit because they are not eligible for the credit. Use Exhibit 8-10, Tax Rate Schedule, Dividends and Capital Gains Tax Rates, 2021 AMT exemption for reference. The Fergusons reported making the following payments during the year: . State income taxes of $4,975. Federal tax withholding of $21,000. Alimony payments to John's former wife of $11,150 (divorced 12/31/2014). Child support payments for John's child with his former wife of $4,330. $12,430 of real property taxes. Sandy was reimbursed $715 for employee business expenses she incurred. She was required to provide documentation for her expenses to her employer. $3,600 to Kid Care day care center for Samantha's care while John and Sandy worked. $16,300 interest on their home mortgage ($400,000 acquisition debt). $3,345 interest on a $44,600 home-equity loan. They used the loan to pay for a family vacation and new car. $16,150 cash charitable contributions to qualified charities. Donation of used furniture to Goodwill. The furniture had a fair market value of $630 and cost $3,150. O . Complete pages 1 and 2, Schedule 1, Schedule 2, and Schedule 3 of Form 1040 and Form 6251 for John and Sandy. John and Sandy Ferguson's address is 19010 N.W. 135th Street, Miami, FL 33054. Social security numbers: John (DOB 11/07/1970): 111-11-1111 Sandy (DOB 6/24/1972): 222-22-2222 Samantha (DOB 9/30/2016): 333-33-3333 Alimony recipient: 555-55-5555 (Input all the values as positive numbers. Round your intermediate calculations and final answers to the nearest whole dollar. Use 2021 tax rules regardless of year on tax form.) 1040 for a couple Married Filing Jointly with one dependent. 1040 PG 1 1040 PG 2 Schedule 1 Schedule 2 Schedule 3 6251 PG 1 Form 1040 Page 1 and 2. Department of the Treasury- Form Internal Revenue Service (99) 1040 U.S. Individual 2020 OMB No. 1545-0074 IRS Use OnlyDo not write or staple in this space. Income Tax Return Married filing Filing Status Single Married filing separately (MFS) Head of household (HOH) Qualifying widow(er) (QW) jointly Check only 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 one box. 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 Home address (number and street). If you have a P.O. box, see instructions. Apt. no. Presidential Election Campaign City, town, or post office. If you have a foreign address, also complete spaces below. State ZIP code Check here if you, or your spouse if filing jointly, want $3 to go to this fund. Checking a box below will not change your tax or refund. necking a box below will not change a your tax or refund. Foreign country name Foreign province/state/county Foreign postal code You Spouse Yes No At any time during 2020, did you receive, sell, send, exchange, or otherwise acquire any financial interest in any virtual currency? Someone can Standard You as a dependent Your spouse as a dependent claim: 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 number (3) Relationship to you (4) vif qualifies for (see instructions): (1) First name Last name Child tax credit Credit for other dependents If more than four dependents, see instructions and check here! 1 1 Wages, salaries, tips, etc. Attach Form(s) W-2 2a Tax-exempt interest Attach Sch. B if 2a b Taxable interest. 2b 1 Wages, salaries, tips, etc. Attach Form(s) W-2 1 2a Tax-exempt interest 2a b Taxable interest. 2b Attach Sch. B if required. 3a Qualified dividends b Ordinary dividends. 3b 4a IRA distributions 4a b Taxable amount 4b 5a Pensions and annuities 5a b Taxable amount 5b 6a Social security benefits b Taxable amount 6b 7 8 9 10a 7 Capital gain or (loss). Amount. Standard Deduction for- 8 Other income from Schedule 1, line 9 Single or Married filing separately, 9 Add lines 1, 2b, 3b, 4b, 5b, 6b, 7, and 8. This is your total income $12,400 Married filing 10 Adjustments to income: jointly or Qualifying a From Schedule 1, line 22 widow(er), $24,800 b Charitable contributions if you take the standard deduction. See instruction Head of household, c Add lines 10a and 10b. These are your total adjustments to income $18,650 If you checked 11 Subtract line 10c from line 9. This is your adjusted gross income any box under 12 Standard deduction or itemized deductions (from Schedule A) Standard Deduction, 13 Qualified business income deduction. Attach Form 8995 or Form 8995-A see instructions. 14 Add lines 12 and 13 10b 10c 11 12 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. Cat. No. 11320B Form 1040 (2020) THIS FORM IS A SIMULATION OF AN OFFICIAL U.S. TAX FORM. IT IS NOT THE OFFICIAL FORM ITSELF. DO NOT USE THIS FORM FOR TAX FILINGS OR FOR ANY PURPOSE OTHER THAN EDUCATIONAL. 2021 McGraw-Hill Education. Form 1040 Page 1 and 2. Form 1040 (2020) Page 2 16 Tax (see instructions). Amount. 1 8814 2 4972 3 16 17 Amount from Schedule 2, line 3... 17 18 Add lines 16 and 17. 18 19 Child tax credit or credit for other dependents 19 20 Amount from Schedule 3, line 7 20 21 Add lines 19 and 20 21 22 Subtract line 21 from line 18. If zero or less, enter -0- 22 23 23 Other taxes, including self-employment tax, from Schedule 2, line 10 24 Add lines 22 and 23. This is your total tax 24 25 Federal income tax withheld from: 25a 25b 25C 25d a Form(s) W-2 b Form(s) 1099 c Other forms (see instructions) d Add lines 25a through 250 If you have a qualifying 26 2020 estimated tax payments and amount applied from 2019 return. child, attach Sch. EIC 27 Earned income credit (EIC) If you have 26 27 27 Sch. EIC 27 Earned income credit (EIC) If you have nontaxable 28 Additional child tax credit. Attach Schedule 8812 combat pay, see 29 American opportunity credit from Form 8863, line 8. instructions. 30 Recovery rebate credit. See instructions 28 29 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 Refund 34 If line 33 is more than line 24, subtract line 24 from line 33. This is the amount you overpaid 34 35a Amount of line 34 you want refunded to you. 35a 2,253 b Routing number c Type: Savings Checking Direct deposit? See instructions. d Account number 36 Amount of line 34 you want applied to your 2021 estimated tax 36 Amount You Owe 37 Subtract line 33 from line 24. This is the amount you owe now 37 Note: Schedule H and Schedule SE filers, line 37 may not represent all of the taxes you owe for 2020. See Schedule 3, line 12e, and its instructions for details 38 Estimated tax penalty (see instructions) 38 For details on how to pay, see instructions. Third For details on how to 38 Estimated tax penalty (see instructions) 38 pay, see instructions. Third Do you want to allow another person to discuss this return with the IRS? See Party instructions No Yes. Complete below. Designee Designee's Personal identification Phone no. 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 Here knowledge. Joint If the IRS sent you an Identity Your signature Date Your occupation return? Protection PIN, enter it here See instructions. (see inst.) Keep a If the IRS sent your spouse an Spouse's signature. If a joint return, both must sign. Date Spouse's occupation Identity Protection PIN, enter it here your records. (see inst.) copy for Phone no. Email address Preparer's name Preparer's signature Date PTIN Check if: Paid Preparer Self-employed Use Firm's name Phone no. Only Firm's address Firm's EIN Go to www.irs.gov/Form 1040 for instructions and the latest information. Form 1040 (2020) THIS FORM IS A SIMULATION OF AN OFFICIAL U.S. TAX FORM. IT IS NOT THE OFFICIAL FORM ITSELF. DO NOT USE THIS FORM FOR TAX FILINGS OR FOR ANY PURPOSE OTHER THAN EDUCATIONAL. 2021 McGraw-Hill Education. 1040 PG 1 1040 PG 2 Schedule 1 Schedule 2 Schedule 3 6251 PG 1 Form 1040 Schedule 1. OMB No. 1545-0074 SCHEDULE 1 (Form 1040) Additional Income and Adjustments to Income 2020 Attachment Sequence No. 01 Department of the Treasury Attach to Form 1040, 1040-SR, or 1040-NR. Internal Revenue Service Go to www.irs.gov/Form1040 for instructions and the latest information. 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 4 Other gains or (losses). Attach Form 4797 Rental real estate, royalties, partnerships, S corporations, trusts, etc. Attach Schedule E 5 5 6 6 Farm income or (loss). Attach Schedule F Unemployment compensation 7 7 8 Other income. Amount. 8 8 Other income. Amount. 8 9 9 Combine lines 1 through 8. Enter here and on Form 1040, 1040-SR, or 1040-NR, line 8 Adjustments to Income Part II 10 Educator expenses 10 11 Certain business expenses of reservists, performing artists, and fee-basis government officials. Attach Form 2106 11 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 14 15 15 Self-employed SEP, SIMPLE, and qualified plans Self-employed health insurance deduction 16 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 20 21 Tuition and fees deduction. Attach Form 8917 21 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. Cat. No. 71479F Schedule 1 (Form 1040)2020 Form 1040 Schedule 2. OMB No. 1545-0074 SCHEDULE 2 Additional Taxes (Form 1040) Department of the Treasury Attach to Form 1040, 1040-SR, or 1040-NR. Internal Revenue Service Go to www.irs.gov/Form 1040 for instructions and the latest information. Name(s) shown on Form 1040, 1040-SR, or 1040-NR 2020 Attachment Sequence No. 02 Your social security number Part 1 Tax 1 Alternative minimum tax. Attach Form 6251 1 2 Excess advance premium tax credit repayment. Attach Form 8962 2 3 Add lines 1 and 2. Enter here and on Form 1040, 1040-SR, or 1040-NR, line 17 3 Part II Other Taxes 4 Self-employment tax. Attach Schedule SE 4 5 Unreported social security and Medicare tax from Form: a 4137 b 8919 5 6 Additional tax on IRAs, other qualified retirement plans, and other tax-favored accounts. Attach Form 5329 if required 6 7a Household employment taxes. Attach Schedule H 7a b Repayment of first-time homebuyer credit from Form 5405. Attach Form 5405 if required 7b 8 Taxes from: a Form 8959 b Form 8960 8 c Instructions; enter code(s) 9 Section 965 net tax liability installment from Form 965-A 9 10 Add lines 4 through 8. These are your total other taxes. Enter here and on Form 1040 or 1040-SR, line 23, or Form 1040-NR, 10 line 23b For Paperwork Reduction Act Notice, see your tax return instructions. Cat. No. 71478U Schedule 2 (Form 1040) 2020 THIS FORM IS A SIMULATION OF AN OFFICIAL U.S. TAX FORM. IT IS NOT THE OFFICIAL FORM ITSELF. DO NOT USE THIS FORM FOR TAX FILINGS OR FOR ANY PURPOSE OTHER THAN EDUCATIONAL. 2021 McGraw-Hill Education. > 1040 PG 1 1040 PG 2 Schedule 1 Schedule 2 Schedule 3 6251 PG 1 Form 1040 Schedule 3. Additional Credits and Payments OMB No. 1545-0074 SCHEDULE 3 (Form 1040) Department of the Treasury Internal Revenue Service Name(s) shown on Form 1040 or 1040-SR 2020 Attach to Form 1040 or 1040-SR. Go to www.irs.gov/Form 1040 for instructions and the latest information. Attachment Sequence No. 03 Your social security number Parti Nonrefundable Credits 1 Foreign tax credit. Attach Form 1116 if required 1 2 Credit for child and dependent care expenses. Attach Form 2441 2 3 Education credits from Form 8863, line 19 3 4 Retirement savings contributions credit. Attach Form 8880 4 5 Residential energy credits. Attach Form 5695 5 6 Other credits from Form: a 3800 b 8801 6 7 Add lines 1 through 6. Enter here and on Form 1040, 1040-SR, or 1040-NR, line 20 7 Part II Other Payments and Refundable Credits Part II Other Payments and Refundable Credits 8 Net premium tax credit. Attach Form 8962 8 9 9 Amount paid with request for extension to file (see instructions) 10 Excess social security and tier 1 RRTA tax withheld 10 11 Credit for federal tax on fuels. Attach Form 4136 11 12 Other payments or refundable credits: a Form 2439 12a b Qualified sick and family leave credits from Schedule(s) H and Form(s) 7202 12b c Health coverage tax credit from Form 8885 12c d Other: 12d e Deferral for certain Schedule H or SE filers (see instructions) 12e f Add lines 12a through 12e 12f 13 Add lines 8 through 12f. Enter here and on Form 1040, 1040-SR, or 1040-NR, line 31 13 For Paperwork Reduction Act Notice, see your tax return instructions. Cat. No. 71480G Schedule 3 (Form 1040) 2020 THIS FORM IS A SIMULATION OF AN OFFICIAL U.S. TAX FORM. IT IS NOT THE OFFICIAL FORM ITSELF. DO NOT USE THIS FORM FOR TAX FILINGS OR FOR ANY PURPOSE OTHER THAN EDUCATIONAL. 2021 McGraw-Hill Education. Form 6251 Page 1 and 2. Form 6251 Alternative Minimum Tax- Individuals OMB No. 1545-0074 2020 Department of the Treasury Go to www.irs.gov/Form 6251 for instructions and the latest information. Internal Revenue Service (99) Attach to Form 1040, 1040-SR, or 1040-NR. Attachment Sequence No. 32 Name(s) shown on Form 1040, 1040-SR, or 1040-NR Your social security number John and Sandy Ferguson Alternative Minimum Taxable Part| (See instructions for how to complete each line.) Income 1 Enter the amount from Form 1040 or 1040-SR, line 15, if more than zero. If Form 1040 or 1040-SR, line 15, is zero, subtract lines 12 and 13 of Form 1040 or 1040-SR from line 11 of Form 1040 or 1040-SR and enter the result here. (If less than zero, enter as a negative amount.) 1 2 a If filing Schedule A (Form 1040) enter the taxes from Schedule A, line 7; otherwise, enter the amount from Form 1040 or 1040-SR, line 12 2a b Tax refund from Schedule 1 (Form 1040), line 1 or line 8 2b Investment interest expense (difference between regular tax and AMT) 2c d Depletion (Difference between regular tax and AMT) 2d e Net operating loss deduction from Schedule 1 (Form 1040), line 8. Enter as a positive amount 2e f Alternative tax net operating loss deduction. 2f g Interest from specified private activity bonds exempt from the regular tax 2g h Qualified small business stock, see instructions 2h i Exercise of incentive stock options (excess of AMT income over regular tax income) 2i j Estates and trusts (amount from Schedule K-1 (Form 1041), box 12, code A) 2j k Disposition of property (Difference between AMT and regular tax gain or loss) 2k 2j 2k 21 2m 2n 20 Estates and trusts (amount from Schedule K-1 (Form 1041), box 12, code A) k Disposition of property (Difference between AMT and regular tax gain or loss) I Depreciation on assets placed in service after 1986 (Difference between regular tax and AMT) m Passive activities (difference between AMT and regular tax income or loss) n Loss limitations (difference between AMT and regular tax income or loss) o Circulation costs (difference between regular tax and AMT) p Long-term contracts (difference between AMT and regular tax income) q Mining costs (difference between regular tax and AMT) Research and experimental costs (difference between regular tax and AMT) Income from certain installment sales before January 1, 1987 Intangible drilling costs preference Other adjustments, including income-based related adjustments Alternative minimum taxable income. Combine lines 1 through 3. (If married filing separately and line 4 is more than $745,200, see instructions.) 2p 29 r 2r S 2s t 2t 3 4 Part II Alternative Minimum Tax (AMT) Exemption. IF your filing status is... AND line 4 is not over... THEN enter on line 5... Single or head of household $ 518,400 $ 72,900 } 5 Married filing jointly or 1,036,800 113,400 qualifying widow(er) Married filing separately 518,400 56,700 If line 4 is over the amount shown above for your filing status, see instructions. Subtract line 5 from line 4. If more than zero, go to line 7. If zero or less, enter -O- here and on lines 7, 9, and 11, and go to line 10 If you are filing Form 2555. see instructions for the amount to enter. 6 If line 4 is over the amount shown above for your filing status, see instructions. Subtract line 5 from line 4. If more than zero, go to line 7. If zero or less, enter-O- here and on lines 7, 9, and 11, and go to line 10 If you are filing Form 2555, see instructions for the amount to enter. 6 6 7 If you reported capital gain distributions directly on Form 1040 or 1040-SR, line 7; you reported qualified dividends on Form 1040 or 1040-SR, line 3a; or you had a gain on both lines 15 and 16 of Schedule D (Form 1040) (as refigured for the AMT, if necessary), complete 7 Part III on the back and enter the amount from line 40 here. All others: If line 6 is $197,900 or less ($98,950 or less if married filing separately), multiply line 6 by 26% (0.26). Otherwise, multiply line 6 by 28% (0.28) and subtract $3,958 ($1,979 if married filing separately) from the result Otherwise, multiply line 6 by 28% (0.28) and subtract $3,896 ($1,948 if married filing separately) from the result. 8 Alternative minimum tax foreign tax credit (see instructions) 8 9 Tentative minimum tax. Subtract line 8 from line 7 9 10 Add Form 1040 or 1040-SR, line 16 (minus any tax from Form 4972), and Schedule 2 (Form 1040), line 2. Subtract Subtract from the result any foreign tax credit from Schedule 3 (Form 1040), line 1. If you used Schedule J to figure your tax on Form 1040 or 1040-SR, line 16, refigure that tax without using Schedule J before completing this line (see instructions) 10 11 AMT. Subtract line 10 from line 9. If zero or less, enter -O-. Enter here and on Schedule 2 (Form 1040), line 1 11 For Paperwork Reduction Act Notice, see your tax return Cat. No. 13600G instructions. Form 6251 (2020) THIS FORM IS A SIMULATION OF AN OFFICIAL U.S. TAX FORM. IT IS NOT THE OFFICIAL FORM ITSELF. DO NOT USE THIS FORM FOR TAX FILINGS OR FOR ANY PURPOSE OTHER THAN EDUCATIONAL. 2021 McGraw-Hill Education. This project is more comprehensive than the other tax return projects and entails completing Form 1040, page 1; Form 1040, page 2; Schedule 1; Schedule 2; Schedule 3; and Form 6251, page 1, for a married couple. Be sure to complete all six forms which are identified in boxes at the top of the Form 1040. Click on each box to access the respective form. Also be sure to complete all relevant lines and boxes in the forms including filling in information such as filing status, name, social security numbers, etc., or Connect will state your forms are incomplete, and you will lose points. A filled-in Form 1040, page 1 and 2, and Schedule 1 can be found in Chapter 4 in your textbook on pages 4-25 and 4-26. A filled-in Form 1040, page 2, is also on page 8-40 in Chapter 8 in your textbook. I recommend you complete this project after you have reviewed the Chapter 8 - Part 2 PowerPoint slides (or read the Chapter 8 material). Specific to this project, you should know the following: 1. You do not need to check the "Presidential Election Campaign" box because it is assumed the taxpayers do not want to have $3 of their tax go toward that fund. 2. You also do not need to check any box regarding their virtual currency holdings. Hint: John is an employee as well as self-employed. His net business income would be reported on Schedule C, but you are not required to complete a Schedule C for this project. A filled-in Schedule 1 showing how items related to a sole proprietor are reported on Schedule 1 can be reviewed on page 6-11 in Chapter 6 of your textbook. 5. The date of John's divorce from his former wife is NOT 12/31/2011; it is 12/31/2014. 4. You will need to determine the total amount of itemized deductions even though there is no Schedule A to complete, so you will need to do that separately. To do so, you may want to review the filled-in Schedule A found on page 6-24 in Chapter 6 of your textbook. The total amount of itemized deductions you calculate should be entered on Form 1040, page 1, as one amount. 5. You will need to calculate the taxpayer's tax using the tax rate schedules that you can access within the project. The amount you determine should be entered on line 16 but none of the boxes on line 16 should be checked. 6. You may need a more comprehensive Child and Dependent Care Percentages Table than the one included in Connect. If so, use 24% as the correct percentage. 7. You will need to determine whether the taxpayers are required to pay the alternative minimum tax (AMT), which is done by completing Form 6251. We are not covering this topic in class (or on the final exam), so completing Form 6251 will give you a brief introduction to the alternative minimum tax system. If you would like to understand the AMT before you complete the project, it is discussed on pages 8-7 through 8-12 in Chapter 8 of your textbook. As Chapter 8 discusses, taxpayers are required to pay the greater of their regular tax liability (using the rules discussed in ACC 311) or their alternative minimum tax liability (rules covered in Chapter 8). Briefly, the AMT is an alternative tax base meant to more closely reflect economic income than the regular income tax base." It "ensures that taxpayers generating income pay some minimum amount of income tax each year." Chapter 8 states, To compute their AMT, taxpayers first compute their regular income tax liability. Then they compute the AMT base and multiply the base by the applicable alternative tax rate. They must pay the AMT only when the tax on the AMT base (called the Tentative Minimum Tax (TMT) exceeds their regular tax liability." Form 6251 is used to determine the taxpayer's AMT base and any AMT liability. First, several plus and minus" adjustments are made to the taxpayer's regular taxable income (lines 1-3 on Form 6251) to calculate the taxpayers' alternative minimum taxable income (AMTI) (line 4). The annual AMT exemption (line 5) is then subtracted from the AMTI to determine the AMT tax base (line 6). That tax base is multiplied by the AMT rate to determine the taxpayers' tentative minimum tax (TMT) (lines 7 and 9). The taxpayer's' regular income tax liability (line 10) is then subtracted from the taxpayer's TMT, and if the result is positive, the taxpayer has an alternative minimum tax liability due (AMT liability) (line 11) which is paid in addition to the taxpayer's regular income tax liability. If the taxpayer's regular income tax liability is greater than the TMT, no additional AMT liability is due. These calculations are all made on Form 6251. When you complete this form, the following information will be helpful: a. Lines 1 through 2t: For the amounts requested, enter your amounts from your tax return forms (hint: the majority of these lines will be blank). b. Line 2a: Enter the amount you included in your total itemized deductions for the taxes itemized deduction (i.e., the amount you would have reported on Schedule A, line 7, if you had completed a Schedule A for this project). A filled in Schedule A can be found on page 6-24 in Chapter 6 in your textbook. C. Line 3: There are no other adjustments, so leave this line blank. d. Line 5: Enter the 2021 alternative minimum tax exemption amount of $114,600 (do NOT enter what the Form says to enter, $113,400 (the 2020 exemption amount)). e. Line 7: To make the required tax calculation:_41) Subtract the amount of their qualified dividend income from the amount you entered on Form 6251, line 6, and multiply that resulting amount by 26%; (2) multiply the taxpayers' amount of qualified dividend income by 15%; (3) add these two amounts together; and (4) enter the total on line 7 and on line 9. Leave line 8 blank. f. Line 10: Enter the amount from your Form 1040, line 16, no adjustments are needed to that amount. However, if Connect marks your amount as incorrect, use $21,177. g. Line 11: Make the calculation requested using the amount you report on line 10