Question
Instructions: Based on the following information, prepare the 2015 income tax return. Show all calculations for amounts entered on all forms to receive credit. Background
Instructions:
Based on the following information, prepare the 2015 income tax return. Show all calculations for amounts entered on all forms to receive credit.
Background Information:
Tony A. Johnston(SSN 041-51-5635, Age 50) & Kristi J. Johnston (SSN 041-45-6123, Age 45), file a joint return for 2015. Tony is employed as an architect, and Kristi is employed as a nurse. Details from their respective W-2s are shown below. They claim their 11 year old daughter, Stacey (044-90-2132) as their only dependent. T
Address: 88Main Street
West Haven, CT06516
In order to allow them both to work, the Johnstons paid Sharon Smith (Kristi’s mother, SSN 040-72-1532) $5,000 during the year for after-school childcare. Sharon lives down the street at 52 Main Street, West Haven, CT 06516.
Gross Wages | State Income Tax Withheld | Federal Income Tax Withheld | Social Security Tax Withheld | Medicare Tax Withheld | |
Tony | $225,000 | $11,250 | $56,250 | $7,347 | $3,263 |
Kristi | $70,000 | $3,500 | $16,000 | $4,340 | $1,015 |
During 2015, the Peters purchased an additional property in Litchfield, CT used solely for rental purposes. The cost of the multi family residence was $300,000 of which $50,000 is allocated to land, and additionally $30,000 worth of appliances for the property.All additional expenses related to this residential rental property are listed below. The property was rented beginning on July 1, 2015 with total rental income equaling $25,000 for the year.The property is being depreciated over 27.5 year (330 months).
Address: 117 State Street
Litchfield, CT06759
Expenses related to rental property:
Cleaning and Maintenance | $300 |
Commissions(1) | 4,000 |
Insurance | 700 |
Mortgage Interest | 4,250 |
Real estate taxes | 2,700 |
Repairs | 115 |
Utilities paid by owner | 1,100 |
(1)Paid to leasing company to help them identify and screen potential tenants, collect rents, and schedule necessary repairs and cleaning services.
Additional Information:
The Peters also have receipts for the following income and expenses during the year.
Income:
City of West Haven bond interest | $4,500 |
Key Bank CD interest | 20,925 |
TD Bank interest | 25,438 |
Expenses:
Home mortgage interest (Main Home-West Haven, CT ) | $15,000 |
Real estate taxes (Main Home-West Haven, CT) | 11,500 |
Cash contributions to qualified charity | 7,775 |
Noncash contributions to qualified charity | 130 |
Amount paid when filing their 2014 CT tax return in April of 2015 |
|
Property taxes on both vehicles owned | 950 |
Tax preparation fees | 325 |
The Peters get full health coverage thru Tony’s employer. The Johnstons did not have any interest in a foreign account or trust. They sign their return on April 15, 2016 and decided not to contribute to the Presidential Election Campaign.
Based on the following information, prepare the 2015 income tax return. Show all calculations for amounts entered on all forms to receive credit. details are attached.
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