Form 1040 U.S Individual Income Tax Return with supporting IRS Forms and schedules completed properly and accurate determination of 2016 ferderal income tax liability/overpayment

Tax Forms Problem 2016 income tax information David P. and Karen M. Stevens are married and file a joint income tax return. Their social security numbers are 133-99-4444 and 144-33-1111, respectively. They have two children, a son named Paul A. Stevens, age 14, social security number 132-99-6565 and a daughter, Anne M. Stevens, age 10, social security number 132-88-5656. David and Karen have been married for 16 years and purchased their current home in 2003. The family lives at 1075 Jackson Drive in Coastal City, GA 31133. Karen is a civil engineer employed by the city government. David is a psychiatrist. He is selfemployed and leases office space in a medical building near the local hospital. David and Karen report their income using the cash method. Karen is covered by a qualified retirement plan through her work. She partcipates in a group health insurance plan that covers all four members of the family. The health insurance plan for David's medical practice covers only the full-time receptionist. Income and expense information: Karen's salary (reportable W-2 amount) David's medical practice: Gross receipts Expenses on office books: Attorney's fees Business license Contract labor Country club dues paid by practice County property taxes on office furnishings, computer system, and other equipment Depreciation on office furnishings & equipment General insurance Health insurance for receptionist Malpractice insurance Payroll taxes Professional journals and literature Receptionist's salary Rent - office Repairs and maintenance Utilities Contribution to lobbying group representing doctors 160,000 381,000 1,700 750 2,750 4,800 980 3,240 6,800 5,340 25,000 3,010 2,280 33,000 30,000 1,840 9,650 1,600 Page 1 Other income and deductions: Dividends reported by brokerage account at Smith and Co. Total ordinary dividends of $7,250, of which $5,800 are qualified The dividends were paid by U.S. corporations operating domestically. Sale of land held for investment: Sold: 6/13/2016 Sales price Acquired: 08/15/2007 Cost 126,500 130,200 The land was not used in a trade or business by the taxpayers. The sales was reported on a Form 1099-B that does not disclose the basis of the property. Sale of stock in ABC Bank, Inc. Sold: 02/03/2016 Sales price 18,000 Acquired: 09/30/2005 Cost 15,500 Form 1099-B reported the sales proceeds also discloses the basis. There is a short-term loss of $4,891 carried over from the 2015 return. Interest income on family savings account at My Bank, Inc. 3,021 Medical expenses incurred during 2016 that were not reimbursed by insurance: Doctors and dentists Hospital Contact lenses and glasses 6,052 9,870 1,140 Real estate taxes on personal residence 6,350 Home mortgage interest expense - received Form 1098 Charitable contributions paid by check: Church United Way Red Cross Individual retirement acccount contribution - David Contribution is made to a traditional IRA. Accounting fees were paid in April 2016 for the preparation of the couple's 2015 income tax returns. 50% of the fees are attributable to David's medical practice. 16,808 9,800 1,200 500 5,500 1,760 Page 2 Income taxes paid: Karen had the following 2016 income taxes withheld from her salary. Federal 36,100 State 7,200 The balance due on the couple's state income tax return for 2015 was $750. The balance was paid in April of 2016 when the return was filed. Federal 2016 estimated taxes paid by David: 4/15/2016 6/15/2016 9/15/2016 1/15/2017 17,500 17,500 17,500 17,500 State 2,500 2,500 2,500 2,500 Other information: Assume that David and Karen are not subject to alternative minimum tax. Do not prepare Form 6251 as part of the return. David and Karen's 2015 federal tax was $54,000. They should not be subject to penalty for underpayment of estimated tax, even if additional tax is owed with the return. David's office address: 2024 Hospital Avenue, Suite220 Coastal City, GA 31133 David's business employer identification number: Business name: Psychiatric Clinic 58-3334455 You are not required to complete Form 4562 (depreciation expense form) for the medical practice. Form 4562 is not required if there are no assets placed in service during the current taxable year. You may enter the depreciation expense for continuing assets on the forms reporting the medical practice income. All 1099 forms for the medical practice have been properly filed. The couple has no foreign source income. The couple received adequate document evidencing that the health insurance coverage for the family for 2016 met the ACA requirements for the entire year. Page 3 Group 7 144-33-5555 Coastal City Township 266 Main Steet Coastal City GA 31133 Karen M Stevens 1075 Jackson Drive Coastal City GA 31133 GA AX-70245 160,000.00 36,100.00 118,500.00 7,347.00 160,000.00 2,320.00 x 160,000.00 7,200.00 This copy of tde W-2 form provides the same information as the copy to be filed with the federal income tax return. For purposes of the tax project, it is NOT necessary to include the W-2 form as part of the completed return