I need to fill out 4 tax forms for a specific scenario that I've been given: a 1040, schedule 1, schedule B, and a Qualified Dividends and Capital Gain Tax Worksheet.
Scenario: Alexander Smith and his wife Allison are married and file a joint tax return for 2018. The Smiths live at 1234 Buena Vista Drive, Orlando, FL 32830. Alexander is a commuter airline pilot but took 6 months off from his job in 2018 to obtain a higher level pilots license. The Smiths have a 17 year-old son, Brad, who is enrolled in eleventh grade at the Walt Disney Prep School. The Smiths also have an 18 year-old daughter, Angelina, who is a part-time first year student at Orange County Community College (OCCC). Angelina is married to Sean Shirker, who is 19 years old and also a part-time student at OCCC. Sean and Angelina have a 1 year old child, Trask (Social Security number 115-45-7893). All the Shirkers live in an apartment near the Smiths. Angelina and Sean both also work part-time for Seans wealthy grandfather as apprentices in his business. The Shirkers wages for the year were $50,000 which allowed them to pay all the personal expenses for themselves and Trask.
Name
Social Security number
Date of birth
Alexander Smith
266-15-1966
09/22/1969
Allison Smith
266-34-1967
07/01/1970
Brad Smith
261-55-2121
12/21/2001
Angelina Shirker
261-45-1212
03/31/2000
Sean Shirker
546-78-1235
05/01/1999
Trask Shirker
115-45-7893
10/21/2017
Five years ago, Alexander divorced Jennifer Amistad (Social Security number 341-55-6789). Alexander pays Jennifer $200 per month in alimony under the divorce decree.
Not included with the Smiths tax forms was interest from State of Florida bonds of $145.00.
Alexander also received a Form W-2, Form 1099-INT, and Form 1099-DIV that you should have downloaded in Step 1 above.
e file Bay slvd Kiaaimmee, 3474 2018 2018 rlando atona 73 Disney Way Orlando,F L3280 266-15-1966 Alexander 1,511.00 2018 -Distributi Disney Parking Corporat 500 Reans Rd Lake Bena VistaL 32830 7-4443344 Alllace Smith ista Delve 234 Buena Orlando FL F32830 1040us Ind 2018 U.S. Individual Income Tax Return No 1545-0074 lexander son Smith Orlando, FL, 32830 He birt netum? aud Preparer Use Only Form 1040 018 Amach Schedule 4 Amount you w t SCHEDULE B Fom 1080) Interest and Ordinary Dividends Go to www.irs.gouSchedulal for instructions and the latest infomation 20 18 Part I 1 Ust name of payer. any interest is from a seller-financed morigage and the buyer used the property as apersonal residence, see the ins tructions and list this interest first Also, show that buyer's social security number and address Interest Forn 1040 ine 2b caved a Fo 2 Add the amounts on line t seies EE and I US. savings bonds is Excludable interest on Attach Form 8815 issued after 1989. Part ll Ordinary Dividends Lst name of payer Form 1040 ine Note: I yau 099 DNor PartYou must complete this part ityou (a) had over $1,500ftable interest or ordinary dividends: p)hada No or ( received a dishbuton from or ware a grantar d, or a ransterto. a Foreign Accounts and Trusts a any time during 2018, did you have afinancial interest in or signature authority over a financial account isuch as a bank account, securities account, or brokerage account located in a foreign country? See instructions If "Yes are you required t tle FinCEN Form 114, Report of Foregn Bank and Fin ancial Accounts FBAR) to report that financial interest or signature authority? Soe FinCEN Form 114 and its instructions tor ting requirements andexceptions to those requirements See inshuctions b If you are required to tle FinCEN Form 114, enter the name of the foreign country whane the financial account is located 8 During 2018, dd you receive a distribution from, or ware you the grantor ot or transferor to, a have to fle Form 3520. See instructions For Paperwark Reduction Act Notos, see yourtax retum instuctions 7144 SCHEDULE 1 OMB Noh. 1545-0074 Additional Income and Adjustments to Income 2018 PAttach to Fom 1040. Go to www.irs govlForm 1040 for instructions and the latest information. Actachmont Sequence Na. 01 Your sodial security number Additional 1-9b Reserved 10 Taxable refunds, credits, or offsets of state and local income taxes 11 Alimony received 12 Business income or (loss).Attach Schedule C or C-EZ 13 Capital gain or (oss). Attach Schedule D if required. If not required, check here 13 14 Other gains or (losses. Attach Form 4797 15a Reserved 16a Reserved 17 Rental real estate, royalties, partnerships, S corporations, tusts, et. Attach Scedule E 17 18 Farm income or (ossi. Attach Schedule F 19 Unemployment compensation 20a Reserved 21 Other income. List type and amount 22 Combine the amounts in the farright column If you don't have any adjustments to 15b 16b income, enter here and include on Form1 ine 6. Otherwise, go to ine 23 Adjustments 23 Educator expenses to Income 24 Cerain business expenses of reservists.performing artists, and fee-basis govemment officials.Attach Form 2106 Health savings Moving expenses for members of the Armed Forces Attach Form 3903 25 26 account deduction Attach Form 8889 27 Deductible pat of self-employment tax. Attach Schedule SE 27 28 Self-employed SEP. SIMPLE and qualified plans 29 Self-employed health insurancededuction 30 Penalty on early withdrawal of savings 31a Alimony paid b Recipient's SSN 32 IRA deduction 33 Student loan interest deduction 34 Reserved 35 Reserved 36 Add lines 23 throu 31a For Paperwork Reduction Act Notice, see your tax return instructions. Cat. No. 71479 Schedule 1 (Form 10 2018 Qualified Dividends and Capital Galn Tax Worksheet-Line 11a Keep for Your Records Before you begin: See the earlier instructions for line 11a to see if you can use this worksheet to figure your tax. Before completing this worksheet, complete Form 1040 through line 10 If'you don't have lo file Schedule D and you received capital gain distributions, be sure you checked the box 1. Enter the amount from Form 1040, line 10. However, if you are filing Form 2555 or 2555-E2 (relating to foreign earned income), enter the amount from line 3 of the Foreign Earned Income Tax Worksheet 2. Enter the amount from Form 1040, line 3a" 3. Are you filing Schedule D? Yes. Enter the smaller ofline 15 or 16of Schedule D.Ifeither line 15 or 16 is blank or a koss, enter-0 3. No. Enter the amount from Schedule 1, line 13 4. Add lines 2 and 5. If filing Form 4952 (used to figure investment interest expense deduction), enter any amount from line 4g of that for m. Otherwise, enter 5. 6. Subtract line S trom line 4. Ifzero or less, enter -0 7. Subtract line 6 from line 1. If zero or less, enter 0 8. Enter $38,600 if'single or married filing separately $77,3M) f married filing ontly or qualifying widow(er), $51,700 if head of household. 9. Enter the smaller of line1 or line 8 10. Enter the smaller of line 7 or line 9 1 1. Subtract line 10 from line 9, This amount is taxed at (1% , , , 12. Enter the smaller of line 1 or line 6 13. Enter the amount from line 11 14. Subtract line 13 from line 12 15. Enter 12. 1.3. $425,800 ifsingle, $239,500 if married filing separately $479 (KM) f married filing jointly or qualifying widow(er), $452,400 ifhead of household. 16. Enter the smaller of line 1 or line 15 17. Add lines 7 and 11 IN. Subtract line 17 from line 16. If zero or less, enter-0 19. Enter the smaller of line 14 or line 18 20. Multiply line 19 by 19% (0.15) 21. Add lines 11 and 19 22. Subtract line 21 from line 12 23. Multiply line 22 by 20% (020) 24. Figure the tax on the amount on line 7. If the amount on line 7 is less than $100,000, use the Tax Table 20. 21. 23. to ligure the tax. If,the amount on line 7 s $100.0(KI or more, use the Tax Computation 24. 25. 25. Add lines 20, 23, and 24 26. Figure the tax on the amount on line. If the amount on line is less than $100,000, use the Tax Table to ligure the tax. If the amount on line 1 is SI),000 or mare, use the Tax Computation 26. 27. Tax on all taxable income. Enter the smaller ofline 25 or 26. Also include this amount on the entry space on Form 1040, line 11a. If you are filing Form 2555 or 2555-E2, don't enter this amount on the entry space on Form 1040, ine 1a. Instead, enter it on line 4 of the Foreign Earned Income Tax "If you are filmg Form 2555 or 2555-EZ see ahekoonose 1e Foreign Earned Income Tax Worksheet befre eompleing alus IInc e file Bay slvd Kiaaimmee, 3474 2018 2018 rlando atona 73 Disney Way Orlando,F L3280 266-15-1966 Alexander 1,511.00 2018 -Distributi Disney Parking Corporat 500 Reans Rd Lake Bena VistaL 32830 7-4443344 Alllace Smith ista Delve 234 Buena Orlando FL F32830 1040us Ind 2018 U.S. Individual Income Tax Return No 1545-0074 lexander son Smith Orlando, FL, 32830 He birt netum? aud Preparer Use Only Form 1040 018 Amach Schedule 4 Amount you w t SCHEDULE B Fom 1080) Interest and Ordinary Dividends Go to www.irs.gouSchedulal for instructions and the latest infomation 20 18 Part I 1 Ust name of payer. any interest is from a seller-financed morigage and the buyer used the property as apersonal residence, see the ins tructions and list this interest first Also, show that buyer's social security number and address Interest Forn 1040 ine 2b caved a Fo 2 Add the amounts on line t seies EE and I US. savings bonds is Excludable interest on Attach Form 8815 issued after 1989. Part ll Ordinary Dividends Lst name of payer Form 1040 ine Note: I yau 099 DNor PartYou must complete this part ityou (a) had over $1,500ftable interest or ordinary dividends: p)hada No or ( received a dishbuton from or ware a grantar d, or a ransterto. a Foreign Accounts and Trusts a any time during 2018, did you have afinancial interest in or signature authority over a financial account isuch as a bank account, securities account, or brokerage account located in a foreign country? See instructions If "Yes are you required t tle FinCEN Form 114, Report of Foregn Bank and Fin ancial Accounts FBAR) to report that financial interest or signature authority? Soe FinCEN Form 114 and its instructions tor ting requirements andexceptions to those requirements See inshuctions b If you are required to tle FinCEN Form 114, enter the name of the foreign country whane the financial account is located 8 During 2018, dd you receive a distribution from, or ware you the grantor ot or transferor to, a have to fle Form 3520. See instructions For Paperwark Reduction Act Notos, see yourtax retum instuctions 7144 SCHEDULE 1 OMB Noh. 1545-0074 Additional Income and Adjustments to Income 2018 PAttach to Fom 1040. Go to www.irs govlForm 1040 for instructions and the latest information. Actachmont Sequence Na. 01 Your sodial security number Additional 1-9b Reserved 10 Taxable refunds, credits, or offsets of state and local income taxes 11 Alimony received 12 Business income or (loss).Attach Schedule C or C-EZ 13 Capital gain or (oss). Attach Schedule D if required. If not required, check here 13 14 Other gains or (losses. Attach Form 4797 15a Reserved 16a Reserved 17 Rental real estate, royalties, partnerships, S corporations, tusts, et. Attach Scedule E 17 18 Farm income or (ossi. Attach Schedule F 19 Unemployment compensation 20a Reserved 21 Other income. List type and amount 22 Combine the amounts in the farright column If you don't have any adjustments to 15b 16b income, enter here and include on Form1 ine 6. Otherwise, go to ine 23 Adjustments 23 Educator expenses to Income 24 Cerain business expenses of reservists.performing artists, and fee-basis govemment officials.Attach Form 2106 Health savings Moving expenses for members of the Armed Forces Attach Form 3903 25 26 account deduction Attach Form 8889 27 Deductible pat of self-employment tax. Attach Schedule SE 27 28 Self-employed SEP. SIMPLE and qualified plans 29 Self-employed health insurancededuction 30 Penalty on early withdrawal of savings 31a Alimony paid b Recipient's SSN 32 IRA deduction 33 Student loan interest deduction 34 Reserved 35 Reserved 36 Add lines 23 throu 31a For Paperwork Reduction Act Notice, see your tax return instructions. Cat. No. 71479 Schedule 1 (Form 10 2018 Qualified Dividends and Capital Galn Tax Worksheet-Line 11a Keep for Your Records Before you begin: See the earlier instructions for line 11a to see if you can use this worksheet to figure your tax. Before completing this worksheet, complete Form 1040 through line 10 If'you don't have lo file Schedule D and you received capital gain distributions, be sure you checked the box 1. Enter the amount from Form 1040, line 10. However, if you are filing Form 2555 or 2555-E2 (relating to foreign earned income), enter the amount from line 3 of the Foreign Earned Income Tax Worksheet 2. Enter the amount from Form 1040, line 3a" 3. Are you filing Schedule D? Yes. Enter the smaller ofline 15 or 16of Schedule D.Ifeither line 15 or 16 is blank or a koss, enter-0 3. No. Enter the amount from Schedule 1, line 13 4. Add lines 2 and 5. If filing Form 4952 (used to figure investment interest expense deduction), enter any amount from line 4g of that for m. Otherwise, enter 5. 6. Subtract line S trom line 4. Ifzero or less, enter -0 7. Subtract line 6 from line 1. If zero or less, enter 0 8. Enter $38,600 if'single or married filing separately $77,3M) f married filing ontly or qualifying widow(er), $51,700 if head of household. 9. Enter the smaller of line1 or line 8 10. Enter the smaller of line 7 or line 9 1 1. Subtract line 10 from line 9, This amount is taxed at (1% , , , 12. Enter the smaller of line 1 or line 6 13. Enter the amount from line 11 14. Subtract line 13 from line 12 15. Enter 12. 1.3. $425,800 ifsingle, $239,500 if married filing separately $479 (KM) f married filing jointly or qualifying widow(er), $452,400 ifhead of household. 16. Enter the smaller of line 1 or line 15 17. Add lines 7 and 11 IN. Subtract line 17 from line 16. If zero or less, enter-0 19. Enter the smaller of line 14 or line 18 20. Multiply line 19 by 19% (0.15) 21. Add lines 11 and 19 22. Subtract line 21 from line 12 23. Multiply line 22 by 20% (020) 24. Figure the tax on the amount on line 7. If the amount on line 7 is less than $100,000, use the Tax Table 20. 21. 23. to ligure the tax. If,the amount on line 7 s $100.0(KI or more, use the Tax Computation 24. 25. 25. Add lines 20, 23, and 24 26. Figure the tax on the amount on line. If the amount on line is less than $100,000, use the Tax Table to ligure the tax. If the amount on line 1 is SI),000 or mare, use the Tax Computation 26. 27. Tax on all taxable income. Enter the smaller ofline 25 or 26. Also include this amount on the entry space on Form 1040, line 11a. If you are filing Form 2555 or 2555-E2, don't enter this amount on the entry space on Form 1040, ine 1a. Instead, enter it on line 4 of the Foreign Earned Income Tax "If you are filmg Form 2555 or 2555-EZ see ahekoonose 1e Foreign Earned Income Tax Worksheet befre eompleing alus IInc
