INCOME TAX PREPARATION PROJECT Joe the Plumber and Terri the Teacher Jones have been married for 25 years. They have three wonderful children: Amy, age 24, graduated from the University of Miami with a degree in Astrology. Amy, thinking that this would allow her to pursue a career as an astronaut, soon realized that her nickname, Amy the Astronaut, would be changed. While living at home and virtually penniless, Amy registered and attended classes full-time at Roosevelt University seeking to obtain a Masters Degree in Accounting. Joe and Terri paid $25,000 for tuition and books in the calendar year 2021 for Amy to seek her new calling in life Amy the Accountant. Amy studies very hard in her room at home. She does not have any income and she is determined to become the accountant for her dads plumbing business that they expect to vastly increase. Sally, age 22, a/k/a Sally the Space Cadet, also lives at home. Sally listens to her shows every day after waking at noon. She is not a morning person, but luckily, she has the new gizmo called TIVO. She doesnt work, but attends classes full-time exclusively in the evening. Sally attends a design school, and plans on becoming an interior design person. She is extremely artistic and extremely intelligent. The cost of this school is $15,000 paid by you know who. Louie is #3. He is known as Louie the Legend. Luckily, Louie has his own room, and is known for his black book. He is quite the man, although, only 19. He attends a community college full-time, thinking it will save his parents from financial ruin. The costs are $6,000. His plan is to major in Business and pursue a career in Law. Joe the Plumber married late in life. Joe, age 65, believes he can work for another 15 20 years. He receives taxable social security benefits in the amount of $8,500. Joe, having recently gained notoriety as a result of his vast experience in the plumbing business, decided to utilize this notoriety, and advertises on TV. Unfortunately, this did not work as well as expected. Joes gross income was $225,000 and his expenses were as follows: 1. Ads - $90,000 2. Supplies - 20,000 3. Stationery - 1,000 4. Telephone - 5,000 5. Accounting Fees - 1,500 6. Bank service charges - 500 Joe uses a 2021 Chevrolet Van exclusively for business purposes and the expenses are: gas - $7,500, repairs - $1,500, parking - $500, car washes - $200, insurance - $1,500 and depreciation. The van was purchased on January 1, 2021. Joe also uses a den in his home for administrative and management activities of his business. He does not meet any clients there. His various home expenses are: heating - $2,000, water, electric, gas - $2,000, maintenance and repair - $1,000, real estate taxes - $6,000, home mortgage interest - $8,000, straight-line depreciation - $2,500. The home office space accounts for 1/10 of the total space of his home. Terri, a first grade teacher for the past 30 years, earns $85,000 per year. Her W-2 indicates that $15,000 was withheld in Federal Income Tax and $2,500 was withheld for State Income Tax. She spends $500 for supplies out of her own pocket. Joe has paid in Federal and State Income taxes via quarterly estimates as follows: Federal - $6,000 per quarter and State - $1,000 per quarter. He would like to contribute 15% of his net income to a Keogh Profit Sharing Plan that was created timely. Joe and Terri have received additional income from various sources. Joe received stock in exchange for services from ABC Company with a fair market value of $1,000. They have also received General Electric common stock dividends - $750, Pfizer common stock dividends - $225, interest from a Chase savings account - $2,500, Municipal Bonds City of Chicago - $1,000, Illinois Income Tax refund for the year 2020 received in 2021- $600. They purchased 2,000 shares of stock in Walgreens at $22 on 3/22/10 and sold it at $100 on 10/25/21. Their personal expenses were medical - $8,000, insurance premiums - $10,000 and prescriptions - $1,000 after reimbursement. They contribute regularly to their church at an annual amount of $2,000. They also contributed sundry items to Goodwill Industries in the amount of $2,500. They arrived at this number by using thrift value, the merchandise being obtained on various dates. Terri also paid union dues in the amount of $400 and they paid tax preparation fees in the amount of $1500. Their real estate taxes are $6,000 and interest on the mortgage is $8,000. In addition, their basement flooded on July 1st and they paid repairs in the amount of $25,000. This casualty was not covered by insurance. Further, Terri owns 50% interest in two rental properties. Terri approves prospective tenants and the term of the leases. Her share of the 2021 losses is $30,000. 1. Prepare a list of all tax issues in preparing Joe and Terris 2021 Federal Income Tax return. 2. Prepare a list of all tax issues in preparing Joe and Terris 2021 State of Illinois Income Tax return. 3. Prepare Joe and Terris U.S. 1040 for 2021. 4. Prepare Joe and Terris IL 1040 for 2021. Forms that may be necessary, including but not limited to: 1. US 1040 2. Schedules A&B 3. Schedule C 4. Schedule D 5. Schedule SE 6. Schedule E 7. Schedule 4684 8. Schedule 8283 9. IL 1040 10. Any other schedule deemed necessary for both returns Use the 2021 forms using any and all applicable law for the calendar year 2021