In 2018, Caitlyn Smiths husband Ben passed away. The next year she moved from Louisiana to Texas. Caitlyn has not remarried as of the end of 2020 and currently lives in Portland, TX with her three children (ages as of the end of the year): Elizabeth (23), Joshua (16), and Anthony (11). Caitlyn would like to determine her federal income tax under the filing status that is most advantageous for her.

Caitlyn reported the following information:

• Caitlyns social security number is 194-38-4528
• Elizabeths social security number is 842-48-5684
• Joshuas social security number is 842-43-8495
• Anthonys social security number is 842-65-8429
• Caitlyns mailing address is 23 Freedom Road Portland, Texas, 78374

Elizabeth is single and enrolled as a full-time graduate student at TAMUCC (EIN 33-9654387). TAMUCCs address is 6300 Ocean Dr., Corpus Christi, TX. 78412. She completed her bachelors degree in 2019 and is in her fifth year of full-time higher education schooling. While at school, Elizabeth works part-time at TAMUCC to help with her living expenses earning $3,200. Caitlyn paid for Elizabeths rent, books, tuition, food, clothes, medicine, and other support items which totaled over $16,200 of support for the year. TAMUCC provided Elizabeth with a Form 1098-T at year end.

Elizabeths higher education expenses for her university studies were as follows:

Tuition $6,875

Books $2,225

In order to for Caitlyn to maintain a full-time job, she sends Anthony to a day care program after school five days a week paying $4,600 for his care.

The day care details are as follows:

Legacy Preschool

902 Moore Ave

Portland, TX

EIN: 34-8324659

Caitlyns W-2s for the year reported the following:

Employer	Gross Wages	Federal Income Tax Withholding
Workforce Commission	$53,850	$4,310
Portland Real Estate	$2,800	$290

Caitlyns employers withheld all applicable and appropriate payroll taxes.

On January 1, 2019 (prior year), Caitlyn started a side hustle selling Rodan and Fields. She doesnt have to carry inventory because everything is shipped directly from Corporate, but she does maintain a website and sends samples to her customers and potential customers. She also hosts an event each year to launch new products. This business has allowed her to earn additional money in her spare time to help support her daughter in college. She uses the cash method of accounting and did not have any obligation to file a Form 1099 to any payee during the year. Caitlyn reported the following revenue and expenses for her business this year:

Gross Revenue $4,650

Sample supplies $ 375

New Product Launch Event $ 250

Web site hosting fee $ 300

Caitlyn sold a couple of stocks she had been holding in order to send her kids to visit their grandparents this past summer. The sales were reported on form 1099-B to her and their basis reported to the IRS:

Asset	Date Purchased	Date Sold	Purchase Price	Selling Price
TXU Stock	4/4/19	5/17/20	$7,550	$12,950
Mohawk Industries stock	9/15/19	5/17/20	$4,500	$3,250

Caitlyn also received the following amounts in 2020:

Life Insurance Payment-Mutual Life (Fathers passing) $182,000

Cash gift from her mom $ 9,500

Interest income-First Bank of Portland $ 550

Interest income-GE Bond $ 4,450

Interest income-G-PISD Municipal Bond $ 3,750

Interest income-San Pat County Improvement District Bond $ 1,250

LA state income tax refund* $ 375

*Refund was from state tax she paid in 2019. Caitlyn deducted all her state taxes as itemized deductions, and received full tax benefit for the deductions, on her 2019 federal tax return.

Caitlyn made the following payments during 2020:

Dentist (unreimbursed by insurance) $1,850

Doctors (unreimbursed by insurance) $ 625

Prescriptions (unreimbursed by insurance) $ 190

Real property taxes on residence $7,700

State sales tax paid $2,550

Vehicle registration fee based upon age of vehicle $ 125

Mortgage interest on principal residence (Form 1098 received) $6,000

Interest on Mastercard credit card $2,500

Cash contribution to the American Cancer Society $ 525

Cash contribution to the United Way $1,000

Cash contribution to First Baptist Church Corpus Christi $3,650

Cash contribution to Baylor University $ 350

Caitlyn wants to contribute to the Presidential Election Campaign Fund. She would like to receive a refund (if any) of any tax she may have overpaid for the year. Her preferred method of receiving the refund is by check.

Instructions:

1. Complete the 2020 federal income tax return for Caitlyn Smith. If required information is missing, use reasonable assumptions to fill in the gaps. Schedules C (business income), SE (self-employment tax), and 8812 (child tax credits) and Forms 2441 (child and dependent care credits) and 8863 (education credits) may be helpful to you when completing the necessary calculations for these forms, but do not need to be submitted. In excel, document any calculations you used to fill in the following required forms and schedules:
   1. 1040
   2. Schedule 1
   3. Schedule D
   4. Form 8949
   5. Schedule 2
   6. Schedule 3