Hello, my name is Shady Slim. I understand you are going to help me figure out my gross income for the year . . . whatever that means. Its been a busy year and Im a busy man, so let me give you the lowdown on my life and you can do your thing.
I was unemployed at the beginning of the year and got $2,000 in unemployment compensation. I later got a job as a manager for Roca Cola. I earned $58,500 in base salary this year. My boss gave me a $6,400 Christmas bonus check on December 22. I decided to hold on to that check and not cash it until next year, so I wont have to pay taxes on it this year. Pretty smart, huh? My jobs pretty cool. I get a lot of fringe benefits like a membership to the gym that costs $470 a year and all the Roca Cola I can drink, although I cant really drink a whole lotI figure $40 worth this year.
As part of my manager duties, I get to decide on certain things like contracts for the company. My good buddy, Eddie, runs a bottling company. I made sure that he won the bottling contract for Roca Cola for this year (even though his contract wasnt quite the best). Eddie bought me a Corvette this year for being such a good friend. The Corvette cost $64,000, and Im sure he bought it for me out of the goodness of his heart. What a great guy!
Heres a bit of good luck for the year. Upon leaving my office one day, I found $8,700 lying in the street! Well, one persons bad luck is my good luck, right?
I like to gamble a lot. I won a $29,100 poker tournament in Las Vegas this year. I also won about $5,280 over the year playing the guys at our Friday night poker game. Can you believe that I didnt lose anything this year?
Speaking of the guys, one of them hit me with his car as we were leaving the game one night. He must have been pretty ticked that he lost! I broke my right leg and my left arm. I sued the guy and got $13,800 for my medical expenses and $3,700 to pay my psychotherapist for the emotional problems I had relating to the injuries (I got really depressed!), and I won $13,400 in punitive damages. Thatll teach him that hes not so tough without his car!
Another bit of bad luck. My uncle Monty died this year. I really liked the guy, but the $270,000 inheritance I received from him made me feel a little better about the loss. I did the smart thing with the money and invested it in stocks and bonds and socked a little into my savings account. As a result, I received $670 in dividends from the stock, $270 in interest from the municipal bonds, and $370 in interest from my savings account.
My ex-wife, Alice, is still paying me alimony. Shes a lawyer who divorced me in 2015 because I was unethical or something like that. Because she was making so much money and I was unemployed at the time, the judge ruled that she had to pay ME alimony. Isnt that something? She sent me $4,400 in alimony payments this year. She still kind of likes me, though. She sent me a check for $570 as a Christmas gift this year. I didnt get her anything, though.
So there you go. Thats this year in a nutshell. Can you figure out my gross income and complete page 1 of Form 1040 (through line 7b) and Schedule 1 for me? And because youre a student, this is free, right? Thanks, I owe you one! Let me know if I can get you a six-pack of Roca Cola or something.
1 - complete page 1 of FORM 1040 (through line 8b)
(Use 2020 tax rules regardless of year on the form.)
2020 Tax Rate Schedules Individuals Schedule X-Single If taxable income is over: But not over: $ 0 $ 9,875 $ 9,875 $ 40,125 $ 40,125 $ 85,525 $ 85,525 $163,300 $163,300 $207,350 $207,350 $518,400 $518,400 The tax is: 10% of taxable income $987.50 plus 12% of the excess over $9,875 $4,617.50 plus 22% of the excess over $40,125 $14,605.50 plus 24% of the excess over $85,525 $33,271.50 plus 32% of the excess over $163,300 $47,367.50 plus 35% of the excess over $207,350 $156,235 plus 37% of the excess over $518,400 2019 1040 Department of the Treasury-Internal Revenue Service (99) U.S. Individual Income Tax Return 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 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 Check here if you, or your spouse if filing jointly, want $3 to go to this fund. City, town or post office, state, and ZIP code. If you have a foreign address, also complete spaces below (see instructions). Checking a box below will not change your tax or refund. You Spouse Foreign country name Foreign province/state/county Foreign postal code if more than four dependents, see instructions and here 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: You Were born before January 2, 1955 Are blind Spouse: Was born before January 2, 1955 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 dependents a I 1 2b 3b 4b 4d 5b 6 7a 1 1 Wages, salaries, tips, etc. Attach Form(s) W-2 2a Tax-exempt interest. 2a b Taxable interest. Attach Sch. B if required 3a Qualified dividends. b Ordinary dividends. Attach Sch. B if required Standard Deduction for- 4a IRA distributions. 4a b Taxable amount b Single or Married filing separately, Pensions and annuities 4c d Taxable amount $12,200 5a Social security benefits 5a b Taxable amount Married filing 6 6 jointly or Qualifying Capital gain or loss). Attach Schedule D if required. If not required, check here widower). 7a Other income from Schedule 1, line 9 $24,400 Head of b , Add lines 1, 2b, 3b, 4b, 4d, 5b, 6, and 7a. This is your total income household, 8 $18,350 Adjustments to income from Schedule 1, line 22 If you checked b Subtract line 8a from line 7b. This is your adjusted gross income any box under 9 9 9 Standard deduction or itemized deductions (from Schedule A) 9 Standard Deduction, 10 Qualified business income deduction. Attach Form 8995 or Form 8995-A 10 see instructions. . 11a Add lines 9 and 10 .. b Taxable income. Subtract line 11a from line 8b. If zero or less, enter-O- . , -O- For Disclosure, Privacy Act, and Paperwork Reduction Act Notice, see separate instructions. Cat. No. 11320B 7b 8a 8b 11a 11b Form 1040 (2019) 2020 Tax Rate Schedules Individuals Schedule X-Single If taxable income is over: But not over: $ 0 $ 9,875 $ 9,875 $ 40,125 $ 40,125 $ 85,525 $ 85,525 $163,300 $163,300 $207,350 $207,350 $518,400 $518,400 The tax is: 10% of taxable income $987.50 plus 12% of the excess over $9,875 $4,617.50 plus 22% of the excess over $40,125 $14,605.50 plus 24% of the excess over $85,525 $33,271.50 plus 32% of the excess over $163,300 $47,367.50 plus 35% of the excess over $207,350 $156,235 plus 37% of the excess over $518,400 2019 1040 Department of the Treasury-Internal Revenue Service (99) U.S. Individual Income Tax Return 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 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 Check here if you, or your spouse if filing jointly, want $3 to go to this fund. City, town or post office, state, and ZIP code. If you have a foreign address, also complete spaces below (see instructions). Checking a box below will not change your tax or refund. You Spouse Foreign country name Foreign province/state/county Foreign postal code if more than four dependents, see instructions and here 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: You Were born before January 2, 1955 Are blind Spouse: Was born before January 2, 1955 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 dependents a I 1 2b 3b 4b 4d 5b 6 7a 1 1 Wages, salaries, tips, etc. Attach Form(s) W-2 2a Tax-exempt interest. 2a b Taxable interest. Attach Sch. B if required 3a Qualified dividends. b Ordinary dividends. Attach Sch. B if required Standard Deduction for- 4a IRA distributions. 4a b Taxable amount b Single or Married filing separately, Pensions and annuities 4c d Taxable amount $12,200 5a Social security benefits 5a b Taxable amount Married filing 6 6 jointly or Qualifying Capital gain or loss). Attach Schedule D if required. If not required, check here widower). 7a Other income from Schedule 1, line 9 $24,400 Head of b , Add lines 1, 2b, 3b, 4b, 4d, 5b, 6, and 7a. This is your total income household, 8 $18,350 Adjustments to income from Schedule 1, line 22 If you checked b Subtract line 8a from line 7b. This is your adjusted gross income any box under 9 9 9 Standard deduction or itemized deductions (from Schedule A) 9 Standard Deduction, 10 Qualified business income deduction. Attach Form 8995 or Form 8995-A 10 see instructions. . 11a Add lines 9 and 10 .. b Taxable income. Subtract line 11a from line 8b. If zero or less, enter-O- . , -O- For Disclosure, Privacy Act, and Paperwork Reduction Act Notice, see separate instructions. Cat. No. 11320B 7b 8a 8b 11a 11b Form 1040 (2019)
