FORM 1040 EXERCISE
Shauna Coleman is single. She is employed as an architectural designer for Streamline Design (SD). Shauna wanted to determine her taxable income for this year (2021). She correctly calculated her AGI. However, she wasn't sure how to compute the rest of her taxable income. She provided the following information with hopes that you could use it to determine her taxable income. a. Shauna paid $4,724 for medical expenses for care related to a broken ankle. Also, Shauna's boyfriend, Blake, drove Shauna (in her car) a total of 115 miles to the doctor's office so she could receive care for her broken ankle. b. Shauna paid a total of $3,510 in health insurance premiums during the year (not through an exchange). SD did not reimburse any of this expense. Besides the health insurance premiums and the medical expenses for her broken ankle, Shauna had Lasik eye surgery last year and paid $3,110 for the surgery (she received no insurance reimbursement). She also incurred $494 of other medical expenses for the year. C. SD withheld $1,910 of state income tax, $7,605 of Social Security tax, and $14,940 of federal income tax from Shauna's paychecks throughout the year. d. In 2021, Shauna was due a refund of $294 for overpaying her 2020 state taxes. On her 2020 state tax return that she filed in April 2021, she applied the overpayment toward her 2021 state tax liability. She estimated that her state tax liability for 2021 will be $2,410. e. Shauna paid $3,310 of property taxes on her personal residence. She also paid $544 to the developer of her subdivision because he had to replace the sidewalk in certain areas of the subdivision. f. Shauna paid a $244 property tax based on the state's estimate of the value of her car. g. Shauna has a home mortgage loan in the amount of $242,000 that she secured when she purchased her home. The home is worth about $422,000. Shauna paid interest of $12,740 on the loan this year. h. Shauna made several charitable contributions throughout the year. She contributed stock in ZYX Corporation to the Red Cross. On the date of the contribution, the fair market value of the donated shares was $1,440 and her basis in the shares was $576. Shauna originally bought the ZYX Corporation stock in 2009. Shauna also contributed $344 cash to State University and religious artifacts she has held for several years to her church. The artifacts were valued at $544 and Shauna's basis in the items was $344. Shauna had every reason to believe the church would keep them on display indefinitely. Shauna also drove 200 miles doing church-related errands for her minister. Finally, Shauna contributed $1,310 of services to her church last year. i. Shauna paid $294 in investment advisory fees and another $194 to have her tax return prepared (that is, she paid $194 in 2021 to have her 2020 tax return prepared). j. Shauna is involved in horse racing as a hobby. During the year, she won $2,610 in prize money and incurred $14,400 in expenses. She has never had a profitable year with her horse-racing activities, so she acknowledges that this is a hobby for federal income tax purposes. k. Shauna sustained $2,110 in gambling losses over the year (mostly horse-racing bets) and had only $244 in winnings. Department of the Treasury-Internal Revenue Service (99) Form 1040 U.S. Individual Income Tax Return 2020 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 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 Shauna Coleman 111-11-1111 Spouse's social security number If joint return, spouse's first name and middle initial Last name Home address (number and street). If you have a P.O. box, see instructions. Apt. no. Presidential Election Campaign 19010 N.W. 135th Street; 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 to go to this fund. Checking a box below will not chan Miami, FL 33054 your tax or refund. Foreign country name Foreign province/state/county / Foreign postal code | You Spouse At any time during 2020, did you receive, sell, send, exchange, or otherwise acquire any financial interest in any virtual currency? OYes ONO 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 2 Are blind Spouse: Was bom before January 2, 1956 Is blind Dependents (see instructions): (2) Social security number (3) Relationship to you (4) if qualifies for (see instructions): (1) First name Last name Child tax credit Credit for other dependent If more than four dependents, see instructions and check here oooo 1 Wages, salaries, tips, etc. Attach Form(s) W-2 1 Wages, salaries, tips, etc. Attach Form(s) W-2 1 2a Tax-exempt interest 2a b Taxable interest 2b Attach Sch. Bif required. 3a b Ordinary dividends 3b 3a Qualified dividends 4a IRA distributions 4a b Taxable amount 4b 5a Pensions and annuities 5a b Taxable amount 5b 6a Social security benefits 6a b Taxable amount 6b 7, 7 8 7 Capital gain or loss). Attach Schedule D if required. If not required, check here 8 Other income from Schedule 1, line 9 9 Add lines 1, 25, 36, 4b, 55, 6, 7, and 8. This is your total income 9 , , 10 Adjustments to income: a From Schedule 1, line 22 a 1 9 7. 10a Standard Deduction for- Single or Married filing separately, $12,400 Married filing jointly or Qualifying widow(er). $24.800 Head of household, $18,650 . If you checked any box under Standard Deduction, see instructions. b Charitable contributions if you take the standard deduction. See instructions 10b c Add lines 10a and 10b. These are your total adjustments to income 10c 11 Subtract line 10c from line 9. This is your adjusted gross income 11 7, 12 12 Standard deduction or itemized deductions (from Schedule A) 13 Qualified business income deduction. Attach Form 8995 or Form 8995-A 14 Add lines 12 and 13 13 14 15 7 15 Taxable income. Subtract line 14 from line 11. If zero or less, enter-O- For Disclosure, Privacy Act, and Paperwork Reduction Act Notice, see separate instructions. Cat. No. 11320B Form 1040 (2) OMB No. 1545-0074 SCHEDULE A (Form 1040) Itemized Deductions Go to www.irs.gov/Schedule A for instructions and the latest information. 2020 Department of the Treasury Attach to Form 1040 or 1040-SR. Caution: If you are claiming a net qualified disaster loss on Form 4684, see the instructions for line 16. Internal Revenue Service (99) Attachment Sequence No. 07 Name(s) shown on Form 1040 or 1040-SR Your social security number Shauna 111-11-1111 Medical and Dental Expenses 11,856 Coleman Caution: Do not include expenses reimbursed or paid by others. . 1 Medical and dental expenses (see instructions) 2 Enter amount from Form 1040 or 1040-SR, line 11 2 3 Multiply line 2 by 7.5% (0.075) 4 Subtract line 3 from line 1. If line 3 is more than line 1, enter-O- 5 State and local taxes. . 3 17,175 4 0 Taxes You Paid a State and local income taxes or general sales taxes. You may include either income taxes or general sales taxes on line 5a, but not both. If you elect to include general sales taxes instead of income taxes, check this box 5a 2,204 b State and local real estate taxes (see instructions) 5b 3,310 c State and local personal property taxes 5c 244 d Add lines 5a through 5c 5d e Enter the smaller of line 5d or $10,000 ($5,000 if married filing separately) 5e 6 Other taxes. List type and amount 6 7 7 Add lines 5e and 6 7 0 Interest You Paid 8 Home mortgage interest and points. If you didn't use all of your home mortgage loan(s) to buy, build, or improve your home, see instructions and check this box a Home mortgage interest and points reported to you on Form 1098. See instructions if limited 8a 12,740 Caution: Your mortgage interest deduction may be limited (see instruction) b Home mortgage interest not reported to you on Form 1098. See instructions if limited. If paid to the person from whom you bought the home, see instructions and show that person's name, identifying no., and address Bb c Points not reported to you on Form 1098. See instructions for special rules 8c 8d d Mortgage insurance premiums (see instructions) e Add lines 8a through 8d 8e 9 Investment interest. Attach Form 4952 if required. See instructions 9 10 12.740 11 10 Add lines Be and 9 9 Gifts to 11 Gifts by cash or check. If you made any gift of $250 or more, see instructions Charity 12 Other than by cash or check. If you made any gift of $250 or more, see instructions. You must attach Form 8263 if over $500 Caution: If you made a gift and got a benefit 13 Carryover from prior year for it, see instructions. 14 Add lines 11 through 13 12 13 14 0 Casualty and Theft Losses 15 Casualty and theft loss(es) from a federally declared disaster (other than net qualified disaster losses). Attach Form 4684 and enter the amount from line 18 of that form. See instructions 15 0 16 Otherfrom list in instructions. List type and amount Gambling losses Other Itemized Deductions 16 244 17 Add the amounts in the far right column for lines 4 through 16. Also, enter this amount on Form 1040 or 1040-SR, line 12 17 12.984 Total Itemized Deductions 18 If you elect to itemize deductions even though they are less than your standard deduction, check this box Shauna Coleman is single. She is employed as an architectural designer for Streamline Design (SD). Shauna wanted to determine her taxable income for this year (2021). She correctly calculated her AGI. However, she wasn't sure how to compute the rest of her taxable income. She provided the following information with hopes that you could use it to determine her taxable income. a. Shauna paid $4,724 for medical expenses for care related to a broken ankle. Also, Shauna's boyfriend, Blake, drove Shauna (in her car) a total of 115 miles to the doctor's office so she could receive care for her broken ankle. b. Shauna paid a total of $3,510 in health insurance premiums during the year (not through an exchange). SD did not reimburse any of this expense. Besides the health insurance premiums and the medical expenses for her broken ankle, Shauna had Lasik eye surgery last year and paid $3,110 for the surgery (she received no insurance reimbursement). She also incurred $494 of other medical expenses for the year. C. SD withheld $1,910 of state income tax, $7,605 of Social Security tax, and $14,940 of federal income tax from Shauna's paychecks throughout the year. d. In 2021, Shauna was due a refund of $294 for overpaying her 2020 state taxes. On her 2020 state tax return that she filed in April 2021, she applied the overpayment toward her 2021 state tax liability. She estimated that her state tax liability for 2021 will be $2,410. e. Shauna paid $3,310 of property taxes on her personal residence. She also paid $544 to the developer of her subdivision because he had to replace the sidewalk in certain areas of the subdivision. f. Shauna paid a $244 property tax based on the state's estimate of the value of her car. g. Shauna has a home mortgage loan in the amount of $242,000 that she secured when she purchased her home. The home is worth about $422,000. Shauna paid interest of $12,740 on the loan this year. h. Shauna made several charitable contributions throughout the year. She contributed stock in ZYX Corporation to the Red Cross. On the date of the contribution, the fair market value of the donated shares was $1,440 and her basis in the shares was $576. Shauna originally bought the ZYX Corporation stock in 2009. Shauna also contributed $344 cash to State University and religious artifacts she has held for several years to her church. The artifacts were valued at $544 and Shauna's basis in the items was $344. Shauna had every reason to believe the church would keep them on display indefinitely. Shauna also drove 200 miles doing church-related errands for her minister. Finally, Shauna contributed $1,310 of services to her church last year. i. Shauna paid $294 in investment advisory fees and another $194 to have her tax return prepared (that is, she paid $194 in 2021 to have her 2020 tax return prepared). j. Shauna is involved in horse racing as a hobby. During the year, she won $2,610 in prize money and incurred $14,400 in expenses. She has never had a profitable year with her horse-racing activities, so she acknowledges that this is a hobby for federal income tax purposes. k. Shauna sustained $2,110 in gambling losses over the year (mostly horse-racing bets) and had only $244 in winnings. Department of the Treasury-Internal Revenue Service (99) Form 1040 U.S. Individual Income Tax Return 2020 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 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 Shauna Coleman 111-11-1111 Spouse's social security number If joint return, spouse's first name and middle initial Last name Home address (number and street). If you have a P.O. box, see instructions. Apt. no. Presidential Election Campaign 19010 N.W. 135th Street; 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 to go to this fund. Checking a box below will not chan Miami, FL 33054 your tax or refund. Foreign country name Foreign province/state/county / Foreign postal code | You Spouse At any time during 2020, did you receive, sell, send, exchange, or otherwise acquire any financial interest in any virtual currency? OYes ONO 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 2 Are blind Spouse: Was bom before January 2, 1956 Is blind Dependents (see instructions): (2) Social security number (3) Relationship to you (4) if qualifies for (see instructions): (1) First name Last name Child tax credit Credit for other dependent If more than four dependents, see instructions and check here oooo 1 Wages, salaries, tips, etc. Attach Form(s) W-2 1 Wages, salaries, tips, etc. Attach Form(s) W-2 1 2a Tax-exempt interest 2a b Taxable interest 2b Attach Sch. Bif required. 3a b Ordinary dividends 3b 3a Qualified dividends 4a IRA distributions 4a b Taxable amount 4b 5a Pensions and annuities 5a b Taxable amount 5b 6a Social security benefits 6a b Taxable amount 6b 7, 7 8 7 Capital gain or loss). Attach Schedule D if required. If not required, check here 8 Other income from Schedule 1, line 9 9 Add lines 1, 25, 36, 4b, 55, 6, 7, and 8. This is your total income 9 , , 10 Adjustments to income: a From Schedule 1, line 22 a 1 9 7. 10a Standard Deduction for- Single or Married filing separately, $12,400 Married filing jointly or Qualifying widow(er). $24.800 Head of household, $18,650 . If you checked any box under Standard Deduction, see instructions. b Charitable contributions if you take the standard deduction. See instructions 10b c Add lines 10a and 10b. These are your total adjustments to income 10c 11 Subtract line 10c from line 9. This is your adjusted gross income 11 7, 12 12 Standard deduction or itemized deductions (from Schedule A) 13 Qualified business income deduction. Attach Form 8995 or Form 8995-A 14 Add lines 12 and 13 13 14 15 7 15 Taxable income. Subtract line 14 from line 11. If zero or less, enter-O- For Disclosure, Privacy Act, and Paperwork Reduction Act Notice, see separate instructions. Cat. No. 11320B Form 1040 (2) OMB No. 1545-0074 SCHEDULE A (Form 1040) Itemized Deductions Go to www.irs.gov/Schedule A for instructions and the latest information. 2020 Department of the Treasury Attach to Form 1040 or 1040-SR. Caution: If you are claiming a net qualified disaster loss on Form 4684, see the instructions for line 16. Internal Revenue Service (99) Attachment Sequence No. 07 Name(s) shown on Form 1040 or 1040-SR Your social security number Shauna 111-11-1111 Medical and Dental Expenses 11,856 Coleman Caution: Do not include expenses reimbursed or paid by others. . 1 Medical and dental expenses (see instructions) 2 Enter amount from Form 1040 or 1040-SR, line 11 2 3 Multiply line 2 by 7.5% (0.075) 4 Subtract line 3 from line 1. If line 3 is more than line 1, enter-O- 5 State and local taxes. . 3 17,175 4 0 Taxes You Paid a State and local income taxes or general sales taxes. You may include either income taxes or general sales taxes on line 5a, but not both. If you elect to include general sales taxes instead of income taxes, check this box 5a 2,204 b State and local real estate taxes (see instructions) 5b 3,310 c State and local personal property taxes 5c 244 d Add lines 5a through 5c 5d e Enter the smaller of line 5d or $10,000 ($5,000 if married filing separately) 5e 6 Other taxes. List type and amount 6 7 7 Add lines 5e and 6 7 0 Interest You Paid 8 Home mortgage interest and points. If you didn't use all of your home mortgage loan(s) to buy, build, or improve your home, see instructions and check this box a Home mortgage interest and points reported to you on Form 1098. See instructions if limited 8a 12,740 Caution: Your mortgage interest deduction may be limited (see instruction) b Home mortgage interest not reported to you on Form 1098. See instructions if limited. If paid to the person from whom you bought the home, see instructions and show that person's name, identifying no., and address Bb c Points not reported to you on Form 1098. See instructions for special rules 8c 8d d Mortgage insurance premiums (see instructions) e Add lines 8a through 8d 8e 9 Investment interest. Attach Form 4952 if required. See instructions 9 10 12.740 11 10 Add lines Be and 9 9 Gifts to 11 Gifts by cash or check. If you made any gift of $250 or more, see instructions Charity 12 Other than by cash or check. If you made any gift of $250 or more, see instructions. You must attach Form 8263 if over $500 Caution: If you made a gift and got a benefit 13 Carryover from prior year for it, see instructions. 14 Add lines 11 through 13 12 13 14 0 Casualty and Theft Losses 15 Casualty and theft loss(es) from a federally declared disaster (other than net qualified disaster losses). Attach Form 4684 and enter the amount from line 18 of that form. See instructions 15 0 16 Otherfrom list in instructions. List type and amount Gambling losses Other Itemized Deductions 16 244 17 Add the amounts in the far right column for lines 4 through 16. Also, enter this amount on Form 1040 or 1040-SR, line 12 17 12.984 Total Itemized Deductions 18 If you elect to itemize deductions even though they are less than your standard deduction, check this box
