In Return 1-1, they are employed by their own C-Corporation, so they each receive a W-2
Assuming Jeff and JoAnn have this same business that they run as a regular corporation, prepare their joint Federal income tax return for 2018. They each received a W-2 from the business which is attached. Assume that they have no dependents, do have insurance coverage, and do not have any other income or itemized deductions. Dont forget to include a standard deduction. (They are each under 65 years of age.) You should complete a Form 1040.
Summary of each W-2: Salary $35,000 and $12,000 Federal Income tax withheld.
Note: In this situation, the corporation would pay tax on the $100,000 of income after reducing it for the salaries to officers of $70,000 (35,000 each and medical insurance or $2,000 each). The corporate tax would be (21%).
jeff and JoAnn Jefferson are married and have a joint consulting business. Here are the business revenue and expenses:
| Consulting revenue | $256,000 |
| Salaries expense, employees | 100,000 |
| Payroll tax expense | 18,000 |
| Owners Draw | 70,000 |
| Rent expense | 12,000 |
| New Computer equipment (total cost) Claim section 179 deduction | 10,000 |
| Travel expense | 4,000 |
| Health Insurance (employees) | 6,000 |
| Health Insurance (owners) | 4,000 |
| Meals | 1,000 |
| Entertainment | 1,000 |
| Supplies | 5,000 |
Form W-2 Wage and Tax Statement 1 Wages, tlps, Oiner comp. 35000,00 3 Soclal security wages 35000.00 5 Medicare wages and ips 35000.00 2018 OMB No. 1545-0008 Form W-2 Wage and Tax Statement 2018 OMB No. 1545-0008 a Employees soclal security number 2 Federal Income tax witnt 12000,00 4 Soclal security tax withheld a Employee's 80Clal security 1 wages, ips, other comp. numben 2 Federal Income tax withhtd 35000,00 3 Social securlty wages 35000.00 5 Mediare wages and tlp6 35000,00 12000.00 345-67-8912 b Employer ID number (EIN) 345-67-8912 b Employer ID number (EIN) 4 Soclal security tax withheld 2170.00 G Medicare tax whhald 507.50 2170.00 Medicare tax wiihheG 75-3566676 75-3566676 507.50 C Employers name, addre66, and ZIP code C Empioyers name, address, and ZIP code Jefferson Consulting, Inc. Jefferson Consulting, Inc. 300 Main Street Dallas TX 75201 300 Main Street Dallas TX 75201 d Control number d Control number Employee's name, address, and ZIP code Empioyee's name, address, and ZIP code Jay Jefferson 1234 Main Street Jay Jefferson 1234 Main Street Anytown TX 75201 Anytown TX 75201 19 verncaion code 7 Soclal security tipe 8 Alocated tips 7 S0oal security tips 8 Allocated tips IS Vericaton code 12a See Insirucions for box 12 DD 120 11 Nonquallined plans 10 Dependent care benenH 11 Nonqualined plans 10 Dependent care beneils 12a See Ihstrucilons for boX 12 DD 2000.00 2000.00 120 120 12b 120 120 13 Third-party Elck bay Statutory employee 14 Other 13 Statutory Retirement plan Retrement plan Third-party sick bay employee 14 Other State wages, tips, etc. 15 State/Emplovers state ID number 18 Local wages. tips, etc. 17 State Income tax 16 State wages, tips, etc. 19 Local Income tax 17 State Income tax 16 15 State/Employer's state ID number 18 Local wages, tips, etc. 20 Localty name 19 Local Income tax 20 Locallty name Copy B-To Be Flled With Emplovee's FEDERAL Tax Return This Information Is belna turnlshed fo the Intenmal Revenue Service Copy 2- To be Flled With Employee's State, City or Local Income Tax Return Dept of the Treasury IRS Dept. of the Treasury-IRS DXA Form W-2 Wage and Tax Statement 1 Wages, tlps, Oiner comp. 35000,00 3 Soclal security wages 35000.00 5 Medicare wages and ips 35000.00 2018 OMB No. 1545-0008 Form W-2 Wage and Tax Statement 2018 OMB No. 1545-0008 a Employees soclal security number 2 Federal Income tax witnt 12000,00 4 Soclal security tax withheld a Employee's 80Clal security 1 wages, ips, other comp. numben 2 Federal Income tax withhtd 35000,00 3 Social securlty wages 35000.00 5 Mediare wages and tlp6 35000,00 12000.00 345-67-8912 b Employer ID number (EIN) 345-67-8912 b Employer ID number (EIN) 4 Soclal security tax withheld 2170.00 G Medicare tax whhald 507.50 2170.00 Medicare tax wiihheG 75-3566676 75-3566676 507.50 C Employers name, addre66, and ZIP code C Empioyers name, address, and ZIP code Jefferson Consulting, Inc. Jefferson Consulting, Inc. 300 Main Street Dallas TX 75201 300 Main Street Dallas TX 75201 d Control number d Control number Employee's name, address, and ZIP code Empioyee's name, address, and ZIP code Jay Jefferson 1234 Main Street Jay Jefferson 1234 Main Street Anytown TX 75201 Anytown TX 75201 19 verncaion code 7 Soclal security tipe 8 Alocated tips 7 S0oal security tips 8 Allocated tips IS Vericaton code 12a See Insirucions for box 12 DD 120 11 Nonquallined plans 10 Dependent care benenH 11 Nonqualined plans 10 Dependent care beneils 12a See Ihstrucilons for boX 12 DD 2000.00 2000.00 120 120 12b 120 120 13 Third-party Elck bay Statutory employee 14 Other 13 Statutory Retirement plan Retrement plan Third-party sick bay employee 14 Other State wages, tips, etc. 15 State/Emplovers state ID number 18 Local wages. tips, etc. 17 State Income tax 16 State wages, tips, etc. 19 Local Income tax 17 State Income tax 16 15 State/Employer's state ID number 18 Local wages, tips, etc. 20 Localty name 19 Local Income tax 20 Locallty name Copy B-To Be Flled With Emplovee's FEDERAL Tax Return This Information Is belna turnlshed fo the Intenmal Revenue Service Copy 2- To be Flled With Employee's State, City or Local Income Tax Return Dept of the Treasury IRS Dept. of the Treasury-IRS DXA
