Hello, I currently need help with this income tax question. Attached below as well is an excel sheet used for yax calculations that mist be used. Thank you, your help and time are greatly appreciated:

Please complete the 2022 federal income tax return for Melissa Murray.

1. Melissa Murray is single and has two children. (John and Mary). Melissa provides you with the

following additional information:

o Melissa lives at 430 South Michigan Avenue, Chicago, IL 60605. o Melissas birthday is January 1, 1980. o Johns birthday is March 1, 2010. o Marys birthday is June 30, 2020. o Melissas Social Security number is 007114727. o Johns Social Security number is 005117232. o Marys Social Security number is 004223419.

2. Melissa is employed at PwC as a Senior Audit Manager. Melissas pay stubs indicate that she had

$16,000 withheld in federal taxes, and $5,000 in state taxes withheld, as well as the appropriate Social Security and Medicare taxes.

3. Melissa earned salary of $100,000 before subtracting her 401(k) contributions. She contributed

$10,000 to her 401(k) account.

4. In addition to the taxes withheld from her salary, Melissa also made 4 timely Federal and State

payments of $1,000 per quarter for Federal and $250 per quarter for State.

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5. PwC paid $1,000 of whole life insurance premiums to cover Melissas personal whole life insurance

policy. PwC also paid health club dues of $1,000 to a nearby health club on Melissas behalf. 6. Taking advantage of PwCs educational assistance program, during the Fall semester Melissa enrolled

in two graduate accounting classes at a local college. PwC paid her tuition, fees, and other course-

related costs of $4,500. 7. Melissa manages the newly hired auditors for PwC. In recognition of her superior handling of the new

hires Melissa was awarded the Employee of the Year Award. The cash award was $5,000.

8. On December 1, Melissas mother died. From her mothers estate, she received stock valued at

$50,000 (mothers basis was $15,000) and her mothers house valued at $200,000 (mothers basis in

the house was $25,000).

9. Melissa owns several other investments and in January 2023 received a statement from her brokerage

firm reporting the interest and dividends earned on the investments for 2022:

This is important tax information and is being furnished to the Internal Revenue Service.

1099-DIV Dividends and Distributions

Entity

Description

Amount Amazon

Ordinary dividends

$2,000

1099-INT Interest

Entity

Description

Amount

Village of Bolingbrook (bonds) Interest $700 Tesla Corporation Interest 1,000 State of Illinois (bonds)

Interest

500

10. Melissa received a Form 1099-B from her broker for the sale of the following securities during 2022.

The basis amounts were reported to the IRS. (Reminder: Long Term Capital Gains get a special rate.)

Security Purchase Date Sales Date Sales Price

Cost Basis

IBM stock

6/30/2009 12/31/2022 $ 15,000 $ 6,000 Apple stock

1/1/2015 12/31/2022 $ 12,000 $ 11,000

11. Melissa paid $9,000 in real estate taxes on her principal residence. The real estate tax is used to pay

for town schools and other municipal services.

12. Melissa slipped in front of an ice rink last July. She broke her leg and was unable to work for two

weeks. She incurred $3,000 in medical costs, all of which were paid by the ice rink, they gave her

$2,000 for pain and suffering resulting from the injury, and two free skating lessons.

13. In addition, Melissa incurred the following unreimbursed medical costs:

Optometrist $ 250 Emergency room charges $ 750 Chiropractor $ 550 Dentist $ 500 Doctor $ 800 Prescription drugs

$ 450

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14. On March 1, Melissa took advantage of low interest rates and refinanced her $150,000 home mortgage

with her original lender. Melissa purchased the home in 2018. The new home loan is for 10 years. She

paid $500 in closing costs and $1,000 in discount points (prepaid interest) to obtain the loan. The

house is worth $180,000 and Melissas basis in the house is $90,000. As part of the refinancing

arrangement, she also obtained a $18,000 home-equity loan. She used the proceeds from the home-

equity loan to reduce the balance due on her credit cards. Melissa received several Form 1098

statements from her bank for interest paid by her in 2022. Details appear below:

Primary home mortgage interest $8,500 Home-equity loan interest 750 Credit cards 537 Car loan

425

15. On March 11, 2022, Melissa contributed clothing to Goodwill. The original cost of the clothing was

$900. She has substantiation valuing the donation at $450. The Salvation Army is located at 500 South

Michigan, Chicago, IL 60605. In addition, she made the following cash contributions and received a

statement from each of the following organizations acknowledging her contribution:

St. Jude Foundation $3,000 Judson Church $2,000 Animal Cruelty Society $500 Special Olympics $500

Professor Knutsens Senate campaign $100

16. Melissa has rental property. The total monthly rent received from tenants is $2,000, and all lease

agreements are for one year. The lease requires the tenant to pay a $1,000 security deposit. The

security deposit is to be returned at the end of the lease if the property is in good condition. In July the

air-conditioning went out. Melissa provides you with the following additional information for the

rental in 2022:

Property taxes $6,000 Insurance expense 3,000 Repairs 1,500 Depreciation

2,500

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17. Melissa prepares tax returns in the evening and on weekends (considered a business). She runs her

business from a rental office at 123 Main Street, Chicago, IL 60605. The name of her business is

Murrays Tax Preparation, and the federal identification number is 05-8799561. Her business code is

431216. Melissa has been operating in a business-like way since 2015 and has always shown a profit.

She had the following income and expenses from her business:

Revenues $50,000

Expenses:

Advertising $ 2,000 Rent $12,000 Utilities $ 6,000

Office expenses $ 5,000

18. Melissa uses her 2020 Honda Accord in her business. During 2022, she properly documented 10,000

business miles. The total mileage on her car (i.e., for both business and personal use) during the year

was 15,000 miles. Melissa elects to use the standard mileage method to calculate her car expenses.

(For 2022, use $0.60 cents per mile.) She also spent $500 on tolls and $700 on parking related to the

real estate business. (Separate from the mileage reimbursement.)

Tax Calc Template