Help with tax homework!

Submit your answers in an Excel file, with any supporting tabs clearly labeled.

Kelly Carter, age 38, is single and has no dependents. Kelly is employed as a bookkeeping

manager with Accounting Services, Inc. She also owns and operates QuickBooks Services

located near the campus of University of Georgia at 1324 Milledge Cir., Athens, GA, 30605.

Kelly is a material participant in the business. She is a cash basis taxpayer. Kelly lives at 129

Lenox Place, Athens, GA 30606. Kellys Social Security number is 123-45-6789. Kelly had

health insurance for all months of 2020. During 2020, Kelly had the following income and

expense items:

a.

$85,000 salary from Accounting Services, Inc.

b.

$34,000 gross receipts from her QuickBooks Services business.

c.

$1,650 interest income from Fifth Source National Bank.

d.

$1,900 gain on the sale of Home Depot stock, held 5 months.

e.

$3,000 Christmas bonus from Accounting Services, Inc.

f.

$75,000 life insurance proceeds on the death of her uncle Lou.

g.

$25,000 check received as a birthday gift from her wealthy relative, Lana Booker.

h.

$900 cash won in a church raffle.

i.

Expenses connected with the QuickBooks Service business are as follows.

Office rent

$7,200

Supplies

3,300

Utilities and telephone

5,100

Wages paid to part-time bookkeepers

5,900

Payroll taxes

1,100

Equipment rentals

2,500

j.

$10,220 interest expense on a home mortgage (paid to Georgia Savings and Loan).

k.

Kelly had loaned $2,700 to a friend, Rita James, on June 8, 2018. Rita declared bankruptcy

on September 19, 2020 and was unable to repay the loan. The loan is a bona fide debt.

l.

Accounting Services, Inc., withheld federal income tax of $14,650 and the appropriate

amount of FICA tax from her wages.

m.

$4,600 state income taxes (personal) paid to the state of Georgia

n.

Alimony of $13,500 paid to her former husband, Mark Dawson; the divorce was finalized in

2017, and no changes have been made to the divorce decree since that time.

o.

Interest income of $1,200 on City of Atlanta bonds.

p.

Kelly made estimated Federal tax payments of $3,400.

q.

Property taxes on Kellys personal residence of $3,700.

r.

Charitable contribution of $3,300 cash to her alma mater, Florida State University

s.

$2,000 residential energy tax credit

For this assignment, ignore the self-employment tax.

Required. Compute Kelly Dawsons 2020 Federal income tax payable (or refund due). For this

assignment, you do not have to use IRS tax forms (Form 1040 and supporting schedules), but

your answer should be organized a manner similar to use of the forms. Refer to the Form 1040,

Schedule 1, Schedule 2, Schedules A, B, and C as necessary to understand what information

goes in what order. In particular, indicate supporting details for each of the amounts listed below

that would be reported on the tax forms.

Under each category below, provide supporting detail, including individual amounts that make

up each total. Use an Excel spreadsheet, and show your calculations for the following amounts

(separate tabs might work well for each of these calculations, with the amounts tied together

using Excel formulas to determine taxable income and tax liability):

A.

Gross income (list each item, and the amount), including the amount of Schedule C income

B.

Schedule C business income and expenses

C.

Deductions for adjusted gross income

D.

Adjusted gross income (gross income less deductions for AGI)

E.

Itemized deductions or standard deduction (choose the greater of the two for Kelly)

F.

Taxable income

G.

Income tax liability (use the 2020 tax rate schedules in the textbook)

H.

Amounts due to the IRS (withholding and prepayments) or refund due to Kelly