His firm does NOT reimburse him for any out of pocket expenses that he may incur. FOR TAX YEAR 2020 You Must use 2020 forms). USE THE LAW AS IT EXIST FOR 2020. FOR EXAMPLE, USE 2020 AMOUNTS FOR STANDARD DEDUCTION, PHASEOUT AMOUNTS, ETC. Chandler adopted a duck and a chick from a local pet store. Adoption fees were $30. Monica's Information Your clients, Chandler and Monica Bing have hired you to complete their 2020 tax return (2020 tax year). They wish to pay the minimum amount of taxes possible in this tax year. Disregard AMT. They have provided you with the following information. General information (All ages as of Dec 31, 2020) Monica is a cash basis, self-employed chef with her own restaurant. She didn't receive any 1099-Misc forms, but her total deposits in her business bank account for 2020 show $151,699. In addition to amounts collected from the restaurant, she also received a payment of $500 in cash on Dec 31, 2020 from a former catering dient for a catering job she performed in late 2019. She did not receive a Form 1099 for this amount and she did not put this amount in her bank account They provide the majority of the support and home for their two adopted children, Jack and Erica. The children were NOT adopted in 2020 (they were adopted at birth). They also provide 100% support for "Uncle Joey." Joey is not biologically the uncle to Erica or Jack, but he does live with the Bings full-time in his "Joey room." Joey's only source of income in 2020 is a settlement from a jam related injury he sustained in the amount of $1,500 for bodily injury and $4,000 for compensatory damages. Monica rents a space to have her restaurant, but Monica also uses a small room (100 sq ft) in her home (2,000 sq ft) to keep up with payroll, order supplies, and other administrative duties. She uses her SS number in lieu of an EIN. She incurred the following business related expenses during the year: Restaurant Expenses (utilized at Restaurant) Monica's mother, Judith Geller) lives near Monica and Chandler in her own apartment which Monica helps pay for ($15,000 per year - including utilities; Monica pays $7,500 and Judith pays $6,500)) starting in May after her dad died. Except for $80,000 which Judith received in Sept. 2020 as an inheritance from her deceased husband's estate (her husband died in May. 2020), she has no other source of income (assume she receives no social security). The Bing's friend Phoebe died in January 2020 and she left a lump sum of $200,000 worth of mutual stock funds and an interest bearing cash account at Edward Jones - see below. Printing/copying Legal fees Supplies Internet Service used 100% for her work Postage/UPS Premium for Insurance Policy (100% Business) Worker Salaries (assume contract labor) Utilities Rent Cost of Food Sold $2,963 $1,200 $3,617 $1,200 $296 $1,175 $78,693 $12,159 $12,000 $25,476 Monica's friend Richard gifted an antique mustache comb to Chandler. Its fair market value is $1,100 upon date of transfer and Richard's cost to acquire the comb was $50. Chandler sold the comb for $600 in 2020. Home Expenses Chandler won $3,200 from a Texas Lotto game. He paid $250 total for several tickets and retained the receipts. Chandler lost gross $1,300 rolling dice. He had no other winnings and has documentation. Lawn Care Security (for "officeroom only) Utilities $1,500 $600 $3,623 Chandler's information Chandler works as an advertising executive. He received a W-2 (see attached). During 2020 Monica purchased new appliances in March to use in her restaurant business. The cost of the equipment was $15,863. Chandler is eligible for a bonus each year. Based upon his performance in 2019 he received a $10,000 bonus. The bonus was paid in January 20 20. Addition information Interest Income: Interest from a City of New York municipal bond (see 1099-INT) Report the net taxable income from this investment on Sch E, Part II. Do not fill out passive activity forms) AT&T bond (see 1099-INT) Medical Expenses (unreimbursed portions) Edward Jones Money Market (see 1099-INT) DO NOT FILE ANY FORMS RELATING TO FOREIGN ACCOUNTS Dividend Income: : Chandler's American Mutual Funds Account at Edward Jones (see 1099-DIV) Stock Transactions: ASSUME IRS NOTIFICATION WAS PROVIDED BY BROKER Premiums for health insurance for the family $3,800 (this is the after tax portion Chandler had to pay for the medical Plan provided by his employer) Medicine and drugs (prescription) 3,589 Eyeglasses 1,500 Other Unreimbursed qualified" medical expenses paid by the taxpayer in 2020- all relating to doctor care and a hospital stay when Joey fell and broke his collarbone...again, etc. 4,000* *The Bings received a check for $3,500 in 2021 to reimburse them for a portion of the $4,000 they paid in 2020 Nintendo, 5 shares sold, net sales proceeds from broker $2,000; Date sold 03/1/2020, Basis $ 50 per share, date purchased 10/3/2015 Mileage to & from a medical clinic in Houston_1475 miles on Dec 11, 2019) Apple, 30 shares sold, net sales proceeds from broker $300; Date sold 4/2/2020, Basis $150 per share, date purchased 1/10/2018 Interest Sony, 10 shares sold, net sales proceeds from broker $100; Date sold 4/1/16, Basis $1 per share, date purchased 4/1/2015 Home Mortgage paid on San Marcos home paid to Country (see form (1098) Mortgage paid on rental house (paid to Chase) (see form 1098) Business Use Credit Card (100%) used by Monica for her business $500 Taxes Rental Property Monica and Chandler purchased a rental property in April 2013. For 2020 they had rental income of $25,000. The property's address is 4506 Stasspex, Austin Texas 78704 Real Estate Taxes - Home Real Estate Taxes - rental house $ 4,800 5,000 The expenses for the year were as follows: Mortgage interest (see 1098) Repairs and maintenance Insurance 2,654 2,963 DO NOT CONSIDER DEPRECIATION FOR THIS PROPERTY. Contributions (you have verified all dates as correct) All "cash" and clients have all required receipts and required documentation. (all are IRS recognized non-profit organizations) Salvation Army (check dated in 6/20/20) 175 Girl Scouts of America (ck dated 04/05/20, received cookies worth $10) $210 Church (paid by check dated 10/11/20) 7,200 Other/Miscellaneous Other Investments Business #1 (Viva Las Gavgas.). They invested $10,000 for a 75% share in this business. Chandler is a material participant in this business. The business had a profit of $10,000 in 2020. See K-1 for details. CPA fees Income Tax preparation fees (paid in May 2020 for 2019 return $ 2,000 assume 75% is related to Monica's Sch C) Chandler's unreimbursed "work related" office supplies 1,175 Chandler's airfare to a one-day business meeting in Tulsa, OK 850 Interest paid on Chandler's student loan (got his master's in 2014) $2,800 Child care Expenses Paid for twins: Five Star After-School Care, Austin, TX ID# 05-3434567 (two days a week) $ 7,850 Estimated Taxes Paid (on time) Paid $500 for each of the four quarters; total of $2,000. Needed: Your textbook, IRS Forms, and references such as Pub 17 PREPARE the couple's joint tax return for 2020. Assume that they want to claim the maximum amount of deductions possible and pay the minimum amount of taxes. Make sure to use the 2020 TAX RATES SCHEDULES Turn in a fully prepared tax return with all required schedules just as if this was being filed with the IRS- use supporting working papers and/or schedules which can help explain your computations For example, if there is not enough lines to schedule out your totals, use a supporting schedule which shows how you arrived at the total. DO NOT TURN IN EXTRA PAPERWORK NOT REQUIRED BY THE IRS. Only attach required forms and schedules. Points will be deducted for non-necessary forms or attachments. If any deductions are limited attach a worksheet showing the calculation of the limitation. ***YOU WILL LOSE POINTS FOR NOT FOLLOWING DIRECTIONS*** His firm does NOT reimburse him for any out of pocket expenses that he may incur. FOR TAX YEAR 2020 You Must use 2020 forms). USE THE LAW AS IT EXIST FOR 2020. FOR EXAMPLE, USE 2020 AMOUNTS FOR STANDARD DEDUCTION, PHASEOUT AMOUNTS, ETC. Chandler adopted a duck and a chick from a local pet store. Adoption fees were $30. Monica's Information Your clients, Chandler and Monica Bing have hired you to complete their 2020 tax return (2020 tax year). They wish to pay the minimum amount of taxes possible in this tax year. Disregard AMT. They have provided you with the following information. General information (All ages as of Dec 31, 2020) Monica is a cash basis, self-employed chef with her own restaurant. She didn't receive any 1099-Misc forms, but her total deposits in her business bank account for 2020 show $151,699. In addition to amounts collected from the restaurant, she also received a payment of $500 in cash on Dec 31, 2020 from a former catering dient for a catering job she performed in late 2019. She did not receive a Form 1099 for this amount and she did not put this amount in her bank account They provide the majority of the support and home for their two adopted children, Jack and Erica. The children were NOT adopted in 2020 (they were adopted at birth). They also provide 100% support for "Uncle Joey." Joey is not biologically the uncle to Erica or Jack, but he does live with the Bings full-time in his "Joey room." Joey's only source of income in 2020 is a settlement from a jam related injury he sustained in the amount of $1,500 for bodily injury and $4,000 for compensatory damages. Monica rents a space to have her restaurant, but Monica also uses a small room (100 sq ft) in her home (2,000 sq ft) to keep up with payroll, order supplies, and other administrative duties. She uses her SS number in lieu of an EIN. She incurred the following business related expenses during the year: Restaurant Expenses (utilized at Restaurant) Monica's mother, Judith Geller) lives near Monica and Chandler in her own apartment which Monica helps pay for ($15,000 per year - including utilities; Monica pays $7,500 and Judith pays $6,500)) starting in May after her dad died. Except for $80,000 which Judith received in Sept. 2020 as an inheritance from her deceased husband's estate (her husband died in May. 2020), she has no other source of income (assume she receives no social security). The Bing's friend Phoebe died in January 2020 and she left a lump sum of $200,000 worth of mutual stock funds and an interest bearing cash account at Edward Jones - see below. Printing/copying Legal fees Supplies Internet Service used 100% for her work Postage/UPS Premium for Insurance Policy (100% Business) Worker Salaries (assume contract labor) Utilities Rent Cost of Food Sold $2,963 $1,200 $3,617 $1,200 $296 $1,175 $78,693 $12,159 $12,000 $25,476 Monica's friend Richard gifted an antique mustache comb to Chandler. Its fair market value is $1,100 upon date of transfer and Richard's cost to acquire the comb was $50. Chandler sold the comb for $600 in 2020. Home Expenses Chandler won $3,200 from a Texas Lotto game. He paid $250 total for several tickets and retained the receipts. Chandler lost gross $1,300 rolling dice. He had no other winnings and has documentation. Lawn Care Security (for "officeroom only) Utilities $1,500 $600 $3,623 Chandler's information Chandler works as an advertising executive. He received a W-2 (see attached). During 2020 Monica purchased new appliances in March to use in her restaurant business. The cost of the equipment was $15,863. Chandler is eligible for a bonus each year. Based upon his performance in 2019 he received a $10,000 bonus. The bonus was paid in January 20 20. Addition information Interest Income: Interest from a City of New York municipal bond (see 1099-INT) Report the net taxable income from this investment on Sch E, Part II. Do not fill out passive activity forms) AT&T bond (see 1099-INT) Medical Expenses (unreimbursed portions) Edward Jones Money Market (see 1099-INT) DO NOT FILE ANY FORMS RELATING TO FOREIGN ACCOUNTS Dividend Income: : Chandler's American Mutual Funds Account at Edward Jones (see 1099-DIV) Stock Transactions: ASSUME IRS NOTIFICATION WAS PROVIDED BY BROKER Premiums for health insurance for the family $3,800 (this is the after tax portion Chandler had to pay for the medical Plan provided by his employer) Medicine and drugs (prescription) 3,589 Eyeglasses 1,500 Other Unreimbursed qualified" medical expenses paid by the taxpayer in 2020- all relating to doctor care and a hospital stay when Joey fell and broke his collarbone...again, etc. 4,000* *The Bings received a check for $3,500 in 2021 to reimburse them for a portion of the $4,000 they paid in 2020 Nintendo, 5 shares sold, net sales proceeds from broker $2,000; Date sold 03/1/2020, Basis $ 50 per share, date purchased 10/3/2015 Mileage to & from a medical clinic in Houston_1475 miles on Dec 11, 2019) Apple, 30 shares sold, net sales proceeds from broker $300; Date sold 4/2/2020, Basis $150 per share, date purchased 1/10/2018 Interest Sony, 10 shares sold, net sales proceeds from broker $100; Date sold 4/1/16, Basis $1 per share, date purchased 4/1/2015 Home Mortgage paid on San Marcos home paid to Country (see form (1098) Mortgage paid on rental house (paid to Chase) (see form 1098) Business Use Credit Card (100%) used by Monica for her business $500 Taxes Rental Property Monica and Chandler purchased a rental property in April 2013. For 2020 they had rental income of $25,000. The property's address is 4506 Stasspex, Austin Texas 78704 Real Estate Taxes - Home Real Estate Taxes - rental house $ 4,800 5,000 The expenses for the year were as follows: Mortgage interest (see 1098) Repairs and maintenance Insurance 2,654 2,963 DO NOT CONSIDER DEPRECIATION FOR THIS PROPERTY. Contributions (you have verified all dates as correct) All "cash" and clients have all required receipts and required documentation. (all are IRS recognized non-profit organizations) Salvation Army (check dated in 6/20/20) 175 Girl Scouts of America (ck dated 04/05/20, received cookies worth $10) $210 Church (paid by check dated 10/11/20) 7,200 Other/Miscellaneous Other Investments Business #1 (Viva Las Gavgas.). They invested $10,000 for a 75% share in this business. Chandler is a material participant in this business. The business had a profit of $10,000 in 2020. See K-1 for details. CPA fees Income Tax preparation fees (paid in May 2020 for 2019 return $ 2,000 assume 75% is related to Monica's Sch C) Chandler's unreimbursed "work related" office supplies 1,175 Chandler's airfare to a one-day business meeting in Tulsa, OK 850 Interest paid on Chandler's student loan (got his master's in 2014) $2,800 Child care Expenses Paid for twins: Five Star After-School Care, Austin, TX ID# 05-3434567 (two days a week) $ 7,850 Estimated Taxes Paid (on time) Paid $500 for each of the four quarters; total of $2,000. Needed: Your textbook, IRS Forms, and references such as Pub 17 PREPARE the couple's joint tax return for 2020. Assume that they want to claim the maximum amount of deductions possible and pay the minimum amount of taxes. Make sure to use the 2020 TAX RATES SCHEDULES Turn in a fully prepared tax return with all required schedules just as if this was being filed with the IRS- use supporting working papers and/or schedules which can help explain your computations For example, if there is not enough lines to schedule out your totals, use a supporting schedule which shows how you arrived at the total. DO NOT TURN IN EXTRA PAPERWORK NOT REQUIRED BY THE IRS. Only attach required forms and schedules. Points will be deducted for non-necessary forms or attachments. If any deductions are limited attach a worksheet showing the calculation of the limitation. ***YOU WILL LOSE POINTS FOR NOT FOLLOWING DIRECTIONS***