Fill in the table below, using the information on this handout, based on what is best for the client. Bill and Judy Davis are married, and are each 35 years old. They have three children, with ages as of Dec. 31, 2019 as listed: Mary, age 5, Peter, age 2, and Lucy, age 4 months. Assume they did not itemize for their 2018 federal income tax return. The W2 table is for the 2019 income tax year. Assume tax laws in 2019 are as described in the textbook. If no information is given about something, assume zero, e.g., zero contributions to an IRA. Your answers should be what is best for the family.

Use 2019 tables for all calculations. They received a state income tax refund of $1,000 in 2019.

Charitable contributions =$3,000. Medical expenses not covered by insurance = $900. Childcare expenses in 2019 = $2,800. Real estate taxes paid in 2019 = $7,800. Interest paid on home mortgage (taken out for a home purchase) in 2019 = $12,200.

W2 forms

Bill

Judy

Box 1 wages

105000

0

Box 3 & Box 5 wages

115,000

0

Box 2 federal income tax withheld in 2019

26,000

0

Box 17, state income tax withheld in 2019

6,500

0

Box 19, local income tax withheld in 2019

0

0

Box 4, Social Security tax withheld in 2019

7,130

0

Box 6, Medicare tax withheld in 2019

1667.5

0

Bill had $10,000 withheld from his paychecks for elective contributions to his employers 401k plan, and his employer contributed an additional $5,000. That is why his Box 1 wage is $10,000 less than his Box 3 & Box 5 wage.

Judy started a counseling business in January, 2019. She paid rent of $9,000 in 2019, and utilities of $5,000. Advertising and other marketing costs in 2019 amounted to $5,000. The gross revenue for her business in 2019 was $100,000.

1

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Fill in the table below, using the information on this handout, based on what is best for the client. Bill and Judy Davis are married, and are each 35 years old. They have three children, with ages as of Dec 31, 2019 as listed: Mary, age 5, Peter, age 2 and Lucy, age 4 months. Assume they did not itemize for their 2018 federal income tax return. The W2 table is for the 2019 income tax year. Assume tax laws in 2019 are as described in the textbook. If no information is given about something, assume zero, c.g. zero contributions to an IRA. Your answers should be what is best for the family Wales, 1 A Scheel LL O d dodati 104 Line 10 M ed mon. Once tax for fundable credits 16 1000 L 1000 L T I Lie 19 is more than Line I tact Line 16 1 1940 Line 20 Use 2019 tables for all calculations. They received a state income tax refund of $1,000 in 2019. Charitable contributions $3,000. Medical expenses not covered by insurance - $900. Childcare expenses in 2019 - $2,800. Real estate taxes paid in 2019 = $7.800. Interest paid on home mortgage (taken out for a home purchase) in 2019 - $12,200 150 BMW 1650 Bill had $10,000 withheld from his paychecks for clective contributions to his employer's 401k plan, and his employer contributed an additional $5,000. That is why his Box I wage is $10,000 less than his Box 3 & Box 5 wage. Judy started a counseling business in January, 2019. She paid rent of $9,000 in 2019, and utilities of $5,000. Advertising and other marketing costs in 2019 amounted to $5,000. The gross revenue for her business in 2019 was $100,000. A W salaries, tips Tables c. Business i n or loss. From Schedule 1040 - O ne Schedule 1040 Line Schedule O Line D. Any other items 10 Le ather apply Arme als F. Any Schedule L. Lines 10-21 Assume that only Schedule 1. Line 14 applies Deductible part of 2019 Fold ings- Line Enduro SDS- deductive how Qualified his ince dodati 104 Line 10 V K 2019 Fedelemme 12019 gal tax rate bracket e cts for 2019- N Nor dable portion of child and family tax credin Line 13 Other secundable credits in Schedule 3 Credit for child care expenses Rem ains credit 100 Line O Income tax r e fundable credits 1040 Line 14 P. Other taxes, including employment tax Total tax income tax before credits self-employment tax) R. Federal nome Tax withheld Line 17-Line Ike. Total payments T. Ir Line 19 is more than Line 16, subtract Line 16 from Line 19. Am I line 17 1040 Line 20 V. IfLine 19 is less than Line 16, subtract Line 19 from Line 16. Amt w 1010 Line 21 Use 2019 tables for all calculations. They received a state income tax refund of $1,000 in 2019. Charitable contributions =$3,000. Medical expenses not covered by insurance - $900. Childcare expenses in 2019 - $2,800. Real estate taxes paid in 2019 = $7.800. Interest paid on home mortgage (taken out for a home purchase) in 2019 = $12,200. Wom Bill lady Ben I wages LOSODO Be Alex swap 115.000 Box 2 federal come within 2019 25,000 Box 17. wild in 2019 65000 Bee 19, local income tax within 2019 Be Social Security as held in 2019 7.1300 Box & Medicare 2019 16675 Bill had S10,000 withheld from his paychecks for elective contributions to his employer's 401k plan, and his employer contributed an additional $5,000. That is why his Box I wage is $10,000 less than his Box 3 & Box 5 wage. Judy started a counseling business in January, 2019. She paid rent of $9,000 in 2019, and utilities of $5,000. Advertising and other marketing costs in 2019 amounted to $5,000. The gross revenue for her business in 2019 was $100,000 A. Wages, salaries, tips, etc. B. Taxable refunds C. Business income or loss. From Schedule C. 1040 Line 1- 1040 Line 1 Schedule 1 1040 Line 3 Schedule 1 1040 Line 7 D. Any other items in 1040 Lines 2a-7a that apply? Assume zero. E. 2019 Federal gross income S- F. Any adjustments to gross income, Schedule 1, Lines 10-21 Assume that only Schedule 1, Line 14 applies: Deductible part of self- employment tax G. 2019 Federal adjusted gross income S - H. Filing status = (single/married filing jointly, household head) (circle) 1. Enter standard deduction (SD) S- Enter itemized deductions (ID) and list below 1040 Line 8b- MFJ 1040 Line 9 = 1. Qualified business income deduction (20% of business income from Schedule Cnet 1040 Line 10 - 1040 Line 1 lb 1040 Line 12b - K. 2019 Federal taxable income S - L. 2019 marginal tax rate (bracket) M. income tax before credits for 2019 S- N. Nonrefundable portion of child and family tax credit Line 13a Other nonrefundable credits in Schedule 3 Credit for child care expenses = Retirement savings credit = 1040 Line 13 O. Income tax after non-refundable credits (1040 Line 14- P. Other taxes, including self-employment tax 0. Total tax (income tax before credits + self-employment tax) R. Federal Income Tax withheld S. Line 17+Line 18e. Total payments T. If Line 19 is more than Line 16, subtract Line 16 from Line 19. Amt overpaid. fLine 19 is less than Line 16. subtract Line 19 from Line 16. Amtowe, 1040 Line 15 1040 Line 16 1040 Line 17= 11040 Line 19 = 1040 Line 20 = V 11040 Line 23