Instructions Note: This problem is for the 2018 tax year. Logan B. Taylor is a widower whose wife, Sara, died on June 6, 2016. He lives at 4680 Dogwood Lane, Springfield, MO 65801. He is employed as a paralegal by a local law firm. For 2018, he reported the following receipts. Salary $ 80,000 $300 Interest income- Money market account at Omni Bank Savings account at Bosne State Bank City of Springfield general purpose bonds Inheritance from Daniel 1,100 3,000 4,400 Life insurance proceeds 60,000 200,000 80,000 9,000 Amount from sale of St. Louis lot Proceeds from estate sale Federal income tax refund (for 2017 tax overpayment) 700 In 2018, Logan inherited securities worth $60,000 from his deceased uncle, Daniel. Logan also was the designated beneficiary of an insurance policy on Daniel's life with a maturity value of $200,000. The lot in St. Louis was purchased on May 2, 2013, for $85,000 and held as an investment. Because the neighborhood has deteriorated, Logan decided to cut his losses and sold the lot on January 5, 2018, for $80,000. The estate sale consisted largely of items belonging to Sara and Daniel (e.g., camper, boat, furniture, and fishing and hunting X Instructions $80,000. The estate sale consisted largely of items belonging to Sara and Daniel (e.g., camper, boat, furniture, and fishing and hunting equipment). Logan estimates that the property sold originally cost at least twice the $9,000 he received and has declined or staved the same in value since Sara and Daniel died. Logan's other 2018 expenditures include the following. $11,500 Medical expenses (including $10,500 for dental services) Taxes $4,200 4,500 8,700 State of Missouri income tax (includes withholdings) Property taxes on personal residence Interest on home mortgage Contribution to church (paid pledges for 2018 and 2019) 5,600 4,800 Logan and his dependent were covered by his employer's health insurance policy for all of 2018. However, he is subject to a deductible, and dental care is not included. The $10,500 dental charge was for Helen's implants. Helen is Logan's widowed mother, who lives with him (see below). Logan normally pledges $2,400 ($200 per month) each year to his church. On December 5, 2018, upon the advice of his pastor, he prepaid his pledge for 2019. Logan's household, all of whom he supports, includes the following. Social Security Number Birth Date Logan Tavlor (age 48) 123-45-6787 08/30/1970 Instructions Social Security Number Birth Date Logan Taylor (age 48) Helen Taylor (age 70) Asher Taylor (age 23) Mia Taylor (age 22) 123-45-6787 123-45-6780 123-45-6783 123-45-6784 08/30/1970 01/13/1948 07/18/1995 02/16/1996 Helen, Logan's mother, receives a modest Social Security benefit. Asher, a son, is a full-time student in dental school and earns $4,500 as a part-time dental assistant. Mia, a daughter, does not work and is engaged to be married. Federal income tax of $4,500 was withheld from his wages. Required: Compute Logan's 2018 Federal income tax. If Logan has any overpayment on his income tax, he wants the refund sent to him. Assume that the proper amounts of Social Security and Medicare taxes were withheld. Logan does not want to contribute to the Presidential Election Campaign Fund. Make realistic assumptions about any missing data. Enter all amounts as positive numbers except any losses. Use the minus sign to indicate a loss. If an amount box does not require an entry or the answer is zero, enter "0". It may be necessary to complete the other tax schedules before completing Form 1040. Use the included tax rate schedules to compute the tax. When computing the tax liability, do not round your immediate calculations. If required round your final answers to the nearest dollar. 2018 Tax rate Schedules Use the 2018 Tax Rate Schedules to compute the tax. (Note: Because the tax rate schedules are used instead of the tax tables, the amount of tax computed may vary slightly from the amount listed in the tables.) 2018 Tax Rate Schedules Single-Schedule X If taxable income is: Over- Head of household-Schedule Z If taxable income is: But not Over- over- of the amount over- But not over- of the amount over- The tax is: The tax is: $0 9,525 38,700 82,500 157,500 200,000 500,000 $9,525 38,700 82,500 157,500 200,000 500,000 ...... ...... 10% $952.50 + 12% 4,453.50 + 22% 14,089.50 + 24% 32,089.50 + 32% 45,689.50 + 35% 150,689.50 + 37% $0 9,525 38,700 82,500 $0 $13,600 ...... 10% 13,600 51,800 $1,360.00 + 12% 51,800 82,500 5,944.00 + 22% 82,500 157,500 12,698.00 + 24% 157,500 200,000 30,698.00 + 32% 200,000 500,000 44,298.00 + 35% 500,000 ...... 149,298.00 + 37% Married filing separately-Schedule Y-2 $0 13,600 51,800 82,500 157,500 200,000 500,000 157,500 200,000 500,000 Married filing jointly or Qualifying widow(er)-Schedule Y-1 If taxable of the If taxable of the 2018 Tax rate Schedules 82,500 157,500 200,000 500,000 157,500 200,000 500,000 ...... 12,698.00 + 24% 30,698.00 + 32% 44,298.00 + 35% 149,298.00 + 37% 82,500 157,500 200,000 500,000 82,500 157,500 14,089.50 + 24% 82,500 157,500 200,000 32,089.50 + 32% 157,500 200,000 500,000 45,689.50 + 35% 200,000 500,000 ...... 150,689.50 + 37% 500,000 Married filing jointly or Qualifying widow(er)-Schedule Y-1 If taxable of the income is: But not amount Over- over- The tax is: over- Married filing separately-Schedule Y-2 If taxable income is: Over- But not over- of the amount over- The tax is: $0 19,050 77,400 $0 9,525 38,700 Orar $9,525 38,700 82,500 $0 19,050 77,400 165,000 $19,050 77,400 165,000 315,000 400,000 600,000 ...... 165,000 ...... 10% $1,905.00 + 12% 8,907.00 + 22% 28,179.00 + 24% 64,179.00 + 32% 91,379.00 + 35% 161,379.00 + 37% 82,500 157,500 ...... 10% $952.50 + 12% 4,453.50 + 22% 14,089.50 + 24% 32,089.50 + 32% 45,689.50 + 35% 80,689.50 + 37% $0 9,525 38,700 82,500 157,500 200,000 300,000 315,000 315,000 200,000 300,000 400,000 600,000 157,500 200,000 300,000 400,000 600,000 Form 1040 Form Department of the Treasury-Internal Revenue Service (99) 1040 U.S. Individual Income Tax Return 2018 OMB No. 1545-0074 IRS Use Only Filing status: Qualifying widow(er) Last name Your first name and initial Logan B. Taylor Your social security number 123-45-6787 Your standard deduction: None If joint return, spouse's first name and initial Last name Spouse's social security number Spouse standard deduction: Someone can claim your spouse as a dependent Spouse was born before January 2, 1954 Spouse is blind Spouse itemizes on a separate return or you were dual- status alien Yes Full-year health care coverage or exempt (see inst.) Home address (number and street). If you have a P.O. box, see instructions. Apt. no. Presidential Election Campaign 4680 Dogwood Lane (see inst.) None City, town or post office, state, and ZIP code. If you have a foreign address, attach Schedule 6. If more than four dependents, see Springfield, MO 65801 inst. and here Dependents (see instructions): (2) Social security number (3) Relationship to you (4) if qualifies for (see inst.): (1) First name Last name Child tax credit | Credit for other dependents Form 1040 Dependents (see instructions): (1) First name Last name (2) Social security number | (3) Relationship to you (4) Vif qualifies for (see inst.): Child tax credit Credit for other dependents Helen Taylor 123-45-6780 Parent Yes Asher Taylor 123-45-6783 Child Yes Yes Mia Taylor 123-45-6784 Child Yes Yes Sign Here Under penalties of perjury, I declare that I have examined this return and accompanying schedules and statements, and to the best of my knowledge and belief, they are true, correct, and complete. Declaration of preparer (other than taxpayer) is based on all information of which preparer has any knowledge. Your signature Your occupation If the IRS sent you an Identity Paralegal Protection PIN, enter it here (see inst.) Date Joint return? See instructions. Keep a copy for your records. Spouse's occupation Spouse's signature. If a joint Date return, both must sign. If the IRS sent you an Identity Protection PIN, enter it here (see inst.) | Paid Preparer's name PTIN Firm's EIN Check if: Preparer's signature Self-Prenared Form 1040 Paid Preparer's name PTIN Firm's EIN Check if: Preparer's signature Self-Prepared Preparer Use Only 3rd Party Designee Self-employed Firm's name Phone no. Firm's address BAA For Disclosure, Privacy Act, and Paperwork Reduction Act Notice, see separate instructions. Form 1040 (2018) Form 1040 (2018) Logan B. Taylor 123-45-6787 Page 2 1 Wages, salaries, tips, etc. Attach Form(s) W-2 ...................... Tax-exempt interest 2a b Taxable interest 2b Qualified dividends b Ordinary dividends 3b 3a 4a IRAs, pensions, and annuities b Taxable amount Attach Form(s) W. 2. Also attach Form(s) W-2G and 1099-R if tax was withheld. 4b 5a 5a Social security benefits b Taxable amount Total income. Add lines 1 through 5. Add any amount from Schedule 1, line 22 Form 1040 withheld. 6 Total income. Add lines 1 through 5. Add any amount from Schedule 1, line 22 ............... Adjusted gross income. If you have no adjustments to income, enter the amount from line 6; otherwise, subtract Schedule 1, line 36, from line 6... 8 Standard deduction or itemized deductions (from Schedule A) ........... 9 Qualified business income deduction (see instructions)..... 10 Taxable income. Subtract lines 8 and 9 from line 7. If zero or less, enter -0-.... a Tax (see inst) (check if any from: 10 Form(s) 8814 2 - Form 4972 30 b Add any amount from Schedule 2 and check here ..... and check nere ............... Standard Deduction for- Single or married filing separately, $12,000 Married filing jointly or Qualifying widow(er), $24,000 Head of household, $18,000 If you checked any box under Standard I deduction, see a Child tax credit/credit for other dependents b Add any amount from Schedule 3 and check here ............... . 13 Subtract line 12 from line 11. If zero or less, enter-O-... 14 Other taxes. Attach Schedule 4 ....... . . Cuulet . . . . . . . . . . . . . . . . . 15 Total tax. Add lines 13 and 14 ............. 15 Form 1040 16 Federal income tax withheld from Forms W-2 and 1099..... 16 instructions. Refundable credits: a EIC (see inst.). b Sch 8812 _c Form 8863 Add any amount from Schedule 5 17 18 Add lines 16 and 17. These are your total payments . . . . . . . . . . . . . . . . . . . . . 18 Refund 19 If line 18 is more than line 15, subtract line 15 from line 18. This is the amount you overpaid..... 20a Amount of line 19 you want refunded to you. If Form 8888 is attached, check here 19 20a Direct deposit? b Routing number c Type: Checking Savings See instructions. d Account number 21 Amount of line 19 you want applied to your 2019 estimated tax .................. Amount 22 Amount you owe. Subtract line 18 from line 15. For details on how to pay, see instructions ... .. 22 we 23 Estimated tax penalty (see instructions)..... Go to www.irs.gov/Form1040 for instructions and the latest information. Form 1040 (2018) Instructions Note: This problem is for the 2018 tax year. Logan B. Taylor is a widower whose wife, Sara, died on June 6, 2016. He lives at 4680 Dogwood Lane, Springfield, MO 65801. He is employed as a paralegal by a local law firm. For 2018, he reported the following receipts. Salary $ 80,000 $300 Interest income- Money market account at Omni Bank Savings account at Bosne State Bank City of Springfield general purpose bonds Inheritance from Daniel 1,100 3,000 4,400 Life insurance proceeds 60,000 200,000 80,000 9,000 Amount from sale of St. Louis lot Proceeds from estate sale Federal income tax refund (for 2017 tax overpayment) 700 In 2018, Logan inherited securities worth $60,000 from his deceased uncle, Daniel. Logan also was the designated beneficiary of an insurance policy on Daniel's life with a maturity value of $200,000. The lot in St. Louis was purchased on May 2, 2013, for $85,000 and held as an investment. Because the neighborhood has deteriorated, Logan decided to cut his losses and sold the lot on January 5, 2018, for $80,000. The estate sale consisted largely of items belonging to Sara and Daniel (e.g., camper, boat, furniture, and fishing and hunting X Instructions $80,000. The estate sale consisted largely of items belonging to Sara and Daniel (e.g., camper, boat, furniture, and fishing and hunting equipment). Logan estimates that the property sold originally cost at least twice the $9,000 he received and has declined or staved the same in value since Sara and Daniel died. Logan's other 2018 expenditures include the following. $11,500 Medical expenses (including $10,500 for dental services) Taxes $4,200 4,500 8,700 State of Missouri income tax (includes withholdings) Property taxes on personal residence Interest on home mortgage Contribution to church (paid pledges for 2018 and 2019) 5,600 4,800 Logan and his dependent were covered by his employer's health insurance policy for all of 2018. However, he is subject to a deductible, and dental care is not included. The $10,500 dental charge was for Helen's implants. Helen is Logan's widowed mother, who lives with him (see below). Logan normally pledges $2,400 ($200 per month) each year to his church. On December 5, 2018, upon the advice of his pastor, he prepaid his pledge for 2019. Logan's household, all of whom he supports, includes the following. Social Security Number Birth Date Logan Tavlor (age 48) 123-45-6787 08/30/1970 Instructions Social Security Number Birth Date Logan Taylor (age 48) Helen Taylor (age 70) Asher Taylor (age 23) Mia Taylor (age 22) 123-45-6787 123-45-6780 123-45-6783 123-45-6784 08/30/1970 01/13/1948 07/18/1995 02/16/1996 Helen, Logan's mother, receives a modest Social Security benefit. Asher, a son, is a full-time student in dental school and earns $4,500 as a part-time dental assistant. Mia, a daughter, does not work and is engaged to be married. Federal income tax of $4,500 was withheld from his wages. Required: Compute Logan's 2018 Federal income tax. If Logan has any overpayment on his income tax, he wants the refund sent to him. Assume that the proper amounts of Social Security and Medicare taxes were withheld. Logan does not want to contribute to the Presidential Election Campaign Fund. Make realistic assumptions about any missing data. Enter all amounts as positive numbers except any losses. Use the minus sign to indicate a loss. If an amount box does not require an entry or the answer is zero, enter "0". It may be necessary to complete the other tax schedules before completing Form 1040. Use the included tax rate schedules to compute the tax. When computing the tax liability, do not round your immediate calculations. If required round your final answers to the nearest dollar. 2018 Tax rate Schedules Use the 2018 Tax Rate Schedules to compute the tax. (Note: Because the tax rate schedules are used instead of the tax tables, the amount of tax computed may vary slightly from the amount listed in the tables.) 2018 Tax Rate Schedules Single-Schedule X If taxable income is: Over- Head of household-Schedule Z If taxable income is: But not Over- over- of the amount over- But not over- of the amount over- The tax is: The tax is: $0 9,525 38,700 82,500 157,500 200,000 500,000 $9,525 38,700 82,500 157,500 200,000 500,000 ...... ...... 10% $952.50 + 12% 4,453.50 + 22% 14,089.50 + 24% 32,089.50 + 32% 45,689.50 + 35% 150,689.50 + 37% $0 9,525 38,700 82,500 $0 $13,600 ...... 10% 13,600 51,800 $1,360.00 + 12% 51,800 82,500 5,944.00 + 22% 82,500 157,500 12,698.00 + 24% 157,500 200,000 30,698.00 + 32% 200,000 500,000 44,298.00 + 35% 500,000 ...... 149,298.00 + 37% Married filing separately-Schedule Y-2 $0 13,600 51,800 82,500 157,500 200,000 500,000 157,500 200,000 500,000 Married filing jointly or Qualifying widow(er)-Schedule Y-1 If taxable of the If taxable of the 2018 Tax rate Schedules 82,500 157,500 200,000 500,000 157,500 200,000 500,000 ...... 12,698.00 + 24% 30,698.00 + 32% 44,298.00 + 35% 149,298.00 + 37% 82,500 157,500 200,000 500,000 82,500 157,500 14,089.50 + 24% 82,500 157,500 200,000 32,089.50 + 32% 157,500 200,000 500,000 45,689.50 + 35% 200,000 500,000 ...... 150,689.50 + 37% 500,000 Married filing jointly or Qualifying widow(er)-Schedule Y-1 If taxable of the income is: But not amount Over- over- The tax is: over- Married filing separately-Schedule Y-2 If taxable income is: Over- But not over- of the amount over- The tax is: $0 19,050 77,400 $0 9,525 38,700 Orar $9,525 38,700 82,500 $0 19,050 77,400 165,000 $19,050 77,400 165,000 315,000 400,000 600,000 ...... 165,000 ...... 10% $1,905.00 + 12% 8,907.00 + 22% 28,179.00 + 24% 64,179.00 + 32% 91,379.00 + 35% 161,379.00 + 37% 82,500 157,500 ...... 10% $952.50 + 12% 4,453.50 + 22% 14,089.50 + 24% 32,089.50 + 32% 45,689.50 + 35% 80,689.50 + 37% $0 9,525 38,700 82,500 157,500 200,000 300,000 315,000 315,000 200,000 300,000 400,000 600,000 157,500 200,000 300,000 400,000 600,000 Form 1040 Form Department of the Treasury-Internal Revenue Service (99) 1040 U.S. Individual Income Tax Return 2018 OMB No. 1545-0074 IRS Use Only Filing status: Qualifying widow(er) Last name Your first name and initial Logan B. Taylor Your social security number 123-45-6787 Your standard deduction: None If joint return, spouse's first name and initial Last name Spouse's social security number Spouse standard deduction: Someone can claim your spouse as a dependent Spouse was born before January 2, 1954 Spouse is blind Spouse itemizes on a separate return or you were dual- status alien Yes Full-year health care coverage or exempt (see inst.) Home address (number and street). If you have a P.O. box, see instructions. Apt. no. Presidential Election Campaign 4680 Dogwood Lane (see inst.) None City, town or post office, state, and ZIP code. If you have a foreign address, attach Schedule 6. If more than four dependents, see Springfield, MO 65801 inst. and here Dependents (see instructions): (2) Social security number (3) Relationship to you (4) if qualifies for (see inst.): (1) First name Last name Child tax credit | Credit for other dependents Form 1040 Dependents (see instructions): (1) First name Last name (2) Social security number | (3) Relationship to you (4) Vif qualifies for (see inst.): Child tax credit Credit for other dependents Helen Taylor 123-45-6780 Parent Yes Asher Taylor 123-45-6783 Child Yes Yes Mia Taylor 123-45-6784 Child Yes Yes Sign Here Under penalties of perjury, I declare that I have examined this return and accompanying schedules and statements, and to the best of my knowledge and belief, they are true, correct, and complete. Declaration of preparer (other than taxpayer) is based on all information of which preparer has any knowledge. Your signature Your occupation If the IRS sent you an Identity Paralegal Protection PIN, enter it here (see inst.) Date Joint return? See instructions. Keep a copy for your records. Spouse's occupation Spouse's signature. If a joint Date return, both must sign. If the IRS sent you an Identity Protection PIN, enter it here (see inst.) | Paid Preparer's name PTIN Firm's EIN Check if: Preparer's signature Self-Prenared Form 1040 Paid Preparer's name PTIN Firm's EIN Check if: Preparer's signature Self-Prepared Preparer Use Only 3rd Party Designee Self-employed Firm's name Phone no. Firm's address BAA For Disclosure, Privacy Act, and Paperwork Reduction Act Notice, see separate instructions. Form 1040 (2018) Form 1040 (2018) Logan B. Taylor 123-45-6787 Page 2 1 Wages, salaries, tips, etc. Attach Form(s) W-2 ...................... Tax-exempt interest 2a b Taxable interest 2b Qualified dividends b Ordinary dividends 3b 3a 4a IRAs, pensions, and annuities b Taxable amount Attach Form(s) W. 2. Also attach Form(s) W-2G and 1099-R if tax was withheld. 4b 5a 5a Social security benefits b Taxable amount Total income. Add lines 1 through 5. Add any amount from Schedule 1, line 22 Form 1040 withheld. 6 Total income. Add lines 1 through 5. Add any amount from Schedule 1, line 22 ............... Adjusted gross income. If you have no adjustments to income, enter the amount from line 6; otherwise, subtract Schedule 1, line 36, from line 6... 8 Standard deduction or itemized deductions (from Schedule A) ........... 9 Qualified business income deduction (see instructions)..... 10 Taxable income. Subtract lines 8 and 9 from line 7. If zero or less, enter -0-.... a Tax (see inst) (check if any from: 10 Form(s) 8814 2 - Form 4972 30 b Add any amount from Schedule 2 and check here ..... and check nere ............... Standard Deduction for- Single or married filing separately, $12,000 Married filing jointly or Qualifying widow(er), $24,000 Head of household, $18,000 If you checked any box under Standard I deduction, see a Child tax credit/credit for other dependents b Add any amount from Schedule 3 and check here ............... . 13 Subtract line 12 from line 11. If zero or less, enter-O-... 14 Other taxes. Attach Schedule 4 ....... . . Cuulet . . . . . . . . . . . . . . . . . 15 Total tax. Add lines 13 and 14 ............. 15 Form 1040 16 Federal income tax withheld from Forms W-2 and 1099..... 16 instructions. Refundable credits: a EIC (see inst.). b Sch 8812 _c Form 8863 Add any amount from Schedule 5 17 18 Add lines 16 and 17. These are your total payments . . . . . . . . . . . . . . . . . . . . . 18 Refund 19 If line 18 is more than line 15, subtract line 15 from line 18. This is the amount you overpaid..... 20a Amount of line 19 you want refunded to you. If Form 8888 is attached, check here 19 20a Direct deposit? b Routing number c Type: Checking Savings See instructions. d Account number 21 Amount of line 19 you want applied to your 2019 estimated tax .................. Amount 22 Amount you owe. Subtract line 18 from line 15. For details on how to pay, see instructions ... .. 22 we 23 Estimated tax penalty (see instructions)..... Go to www.irs.gov/Form1040 for instructions and the latest information. Form 1040 (2018)