I need to file a tax return on the following infomation usinf the 1040 form, thank you so much! I will rate high and thumbs up!

Tax Preparation Project

Instructions: Use the following information to prepare a complete 2016 individual federal income tax return, Form 1040. Include Schedule A. You should use your text, notes, Form 1040, schedules and their instructions, tax law resources, i.e. IRC, Treasury Regulations, IRS publications, etc. You cannot use tax preparation software. The purpose of this project is to put everything you have learned in this class into practice.

Your project is due Dec 14^th at 3:30PM (before the final exam). Please hand in a hard copy of the completed Forms and include an attachment listing calculations for each individual line item. You may work individually or in groups. If working in a group, you are limited to 4 students and you will submit one copy. Please make sure to include the names of all members of your group.

Please consider all limitations, phase outs, thresholds, etc. If you have any questions, contact me!

*Tip: Use AGI for MAGI. In this problem, it is the same amount in most instances and when it isnt, the modification does not affect the outcome.

Facts:

Eric Thomas (SSN: 012-34-5678) and his wife Meghan Thomas (SSN: 012-34-5679) have always filed a joint tax return. The couple were high school sweethearts and have been together since their high school graduation in 1985. They have three children. Their oldest, Gabriella (SSN: 999-55-1111), is 22 years old, and a college student at UMass Dartmouth. Eric and Meghan also have identical twins, Jon (SSN: 999-44-2222) and Sam (SSN: 999-66-3333). The twins are 16 years old, and are juniors at New Bedford High School. The Thomas have two dogs, Mona, a Dachshund, and Derby, a hound mix. The entire family lives in a house located at 111 Reed Street, New Bedford, MA 02740. They bought their home 15 years ago for $175,000.

Eric works as a correctional officer in a Federal Prison located in Woburn, MA. He travels 75 miles, each way, between his home and his workplace.

Erics W-2 for the year reported the following:

Company	Gross Wages	Federal Income Tax Withholding	State Income Tax Withholding
Woburn Correctional Facility	$52,000	$2,200	$700

Erics employers withheld all applicable and appropriate payroll taxes.

Eric also helped a friend with a carpentry job, working as a sub-contractor. He earned $350 for two days work. Erics friend drove him to the job site and supplied him with all required tools and materials. Eric did not have any self- employed business expenses for this job.

Meghan works as a veterinarian in Fairhaven, MA. She has worked at Hairhaven Animal Hospital for the past 12 years.

Meghans W-2 for the year reported the following:

Company	Gross Wages	Federal Income Tax Withholding	State Income Tax Withholding
Hairhaven Animal Hospital	74,000	$4,100	$1,900

Meghans employers withheld all applicable and appropriate payroll taxes.

Meghan is still paying off her college loans for veterinary school; she paid $3,200 in qualified student loan interest during the year.

Meghan and Eric had additional sources of income during the year. Meghan received $50,000 in life insurance proceeds when her favorite aunt, Mary, passed away. Meghan and Eric also have several bank accounts at Bank of America that earned a total of $310 in interest during the year. The couple also received $200 in interest income on municipal bonds that they purchased to benefit the New Bedford School District.

Gabriella is single and a full-time college student at University of Massachusetts Dartmouth. She is pursuing her bachelors degree in accounting. She is about to enter her fourth year of college. In order to keep costs down, Gabriella still lives at home with her parents and commutes to school. Gabriella works part-time at No Problemo to help pay for her car and cell phone. Gabriella earned $3,200 working part time in 2016. Her parents pay all of her other living expenses, i.e., food, board, clothing, medicine, tuition, books, etc. These expenses total $12,700 for the year.

UMass Dartmouth issued a Form 1098-T at the end of the year. Gabriellas education expenses were as follows:

Tuition: $6,500

Books: $2,000

Jon is heavily involved in sports and other extra-curricular activities. He currently has no free time in which to work but he hopes to get a part-time job at a local park next summer. Sam is permanently disabled and requires constant care. He attends an after-school program every weekday until 6PM, which is when Eric gets home from work. The Thomas paid a total of $5,400 for Sams care in 2016.

Jon broke his arm this past year while playing baseball. The Thomas incurred the following medical expenses related to Jons treatment:

Hospital and doctors bills: $2,300

Prescription medicine: $ 200

Rehabilitation therapy: $ 150

The Thomas also incurred additional family medical expenses as follows:

Dentist: $1,500

Doctors: $ 230

Prescriptions: $ 80

Vitamins/ Supplements $ 100

Surgery (cosmetic): $8,500

Meghan and Eric did not receive any reimbursement from their insurance company for these payments. All expenses paid were co-pays, part of their minimum payments, or not covered by their insurance.

The Thomas incurred expenses related to their home. They paid $7,400 in mortgage interest in 2016. They paid the city of New Bedford $5,400 in real estate taxes during the year. They also paid the city $420 in excise tax for their two vehicles (this amount is based on the emissions of the vehicles).

The city of New Bedford requires them to license their dogs and they paid $50 for two dog licenses; the fee is based on the number of dogs per household.

The Thomas are trying to prepare for retirement and took a loan from Bank of America for $4,000 to use for investment purposes. They decided that Google stock was the best investment and used the entire loan proceeds to purchase 15 shares of Google stock. The Thomas paid $210 in investment interest expenses during the year. Google did not pay out any dividends in 2016.

Meghan used some of the money she received from her aunt Marys death to invest $10,000 in her cousin Stevies new ice cream shop, Schmelty, LLC; Meghan does not participate in the business and is a silent partner. Schmelty, LLC took out a non-recourse loan in October 2016 to do some renovations to the shop over the winter. Meghans share of the debt is $1,500. Schmelty, LLC did well this year and reported a net profit. Meghans share of net operating income was $3,500.

Meghan and Eric bought a piece of land in New Hampshire for $7,000 in the year they got married. They had hoped to build a cabin on the property but never got around to developing the land. Due to being so busy with their kids and work, they decided to sell the property in 2016; they sold the property for $15,000. They paid their realtor a commission of $2,000 for the sales transaction.

Finally, Meghan and Eric paid their CPA $350 to prepare their tax return in 2016.

Eric and Meghan would like to receive a refund (if any) of taxes overpaid for the year.