Instructions Note: This problem is for the 2019 tax year. Lance H. and Wanda B. Dean are married and live at 431 Yucca Drive, Santa Fe, NM 87501. Lance works for the convention bureau of the local Chamber of Commerce, and Wanda is employed part-time as a paralegal for a law firm. During 2019, the Deans had the following receipts: Salaries ($60,000 for Lance, $41,000 for Wanda) $ 101,000 Interest income- City of Albuquerque general purpose bonds $1,000 Ford Motor company bonds 1,100 Ally Bank certificate of deposit 400 2,500 Child support payments from John Allen 7,200 Annual gifts from parents 26,000 Settlement from Roadrunner Touring Company 90,000 Lottery winnings 600 Federal income tax refund (for tax year 2018) 400 Wanda was previously married to John Allen. When they divorced several years ago, Wanda was awarded custody of their two children, Penny and Kyle. (Note: Wanda has never issued a Form 8332 waiver.) Under the divorce decree, John was obligated to pay alimony and child support-the alimony payments were to terminate if Wanda remarried. In July, while going to lunch in downtown Santa Fe, Wanda was injured by a tour bus. Because the driver was clearly at fault, the owner of the bus, Roadrunner Touring Company, paid her medical expenses (including a one- week stay in a hospital). To avoid a lawsuit, Roadrunner also transferred $90,000 to her in settlement of the personal injuries she sustained. The Deans had the following expenditures for 2019: Medical expenses (not covered by insurance) $7,200 Taxes- Durand CA The Deans had the following expenditures for 2019: Medical expenses (not covered by insurance) $7,200 Taxes- Property taxes on personal residence $3,600 State of New Mexico income tax (includes amount withheld from wages during 2019) 4,200 7,800 Interest on home mortgage (First National Bank) 6,000 Charitable contributions 3,600 Life insurance premiums (policy on Lance's life) 1,200 Contribution to traditional IRA (on Wanda's behalf) 5,000 Traffic fines 300 Contribution to the reelection campaign fund of the 500 mayor of Santa Fe Funeral expenses for Wayne Boyle 6,300 The life insurance policy was taken out by Lance several years ago and designates Wanda as the beneficiary. As a part-time employee, Wanda is excluded from coverage under her employer's pension plan. Consequently, she provides for her own retirement with a traditional IRA obtained at a local trust company. Because the mayor is a member of the local Chamber of Commerce, Lance felt compelled to make the political contribution. The Deans' household includes the following, for whom they provide more than half of the support: Social Security Birth Date Number Lance Dean (age 123-45-6786 12/16/1977 42) Wanda Dean (age 123-45-6787 08/08/1979 40) Birth Date Instructions Social Security Number Lance Dean (age 42) 123-45-6786 12/16/1977 Wanda Dean (age 40) 123-45-6787 08/08/1979 Penny Allen (age 123-45-6788 10/09/2000 19) Kyle Allen (age 17) 123-45-6780 05/03/2003 Wayne Boyle (age 75) 123-45-6785 06/15/1944 Penny graduated from high school on May 9, 2019, and is undecided about college. During 2019, she earned $8,500 (placed in a savings account) playing a harp in the lobby of a local hotel. Wayne is Wanda's widower father who died on December 20, 2019. For the past few years, Wayne qualified as a dependent of the Deans. Federal income tax withheld is $3,900 (Lance) and $1,800 (Wanda). The proper amount of Social Security and Medicare tax was withheld. Required: Determine the Federal income tax for 2019 for the Deans on a joint return by completing the appropriate forms. Use Form 1040 and Schedule 1 to complete this tax return. They do not own and did not use any virtual currency during the year, and they do not want to contribute to the Presidential Election Campaign Fund. If an overpayment results, it is to be refunded to them. Make realistic assumptions about any missing data. Enter all amounts as positive numbers. If an amount box does not require an entry or the answer is zero, enter "O". Use the tax rate schedules included with this problem. When computing the tax liability, do not round your immediate calculations. If required round your final answers to the nearest dollar. 8814 12a 12b 13a 13b 14 14 15 16 16 17 120 Tax (see inst. Check it any from Form ($): 1 2 4972 3 b Add Schedule 2, line 3, and line 12a and enter the total 13a Child tax credit or credit for other dependents. b Add Schedule 3, line 7, and line 13a and enter the total Subtract line 13b from line 12b. If zero or less, enter-O- 15 Other taxes, including self-employment tax, from Schedule 2, line 10 Add lines 14 and 15. This is your total tax Federal income tax withheld from Forms W-2 and 1099. If you have a 18 other payments and refundable credits: qualifying child, attach Sch. EIC. a Earned income credit (EIC)... If you have Additional child tax credit. Attach Schedule 8812 18b nontaxable combat pay, see c American opportunity credit from Form 8863, line 8 Instructions d Schedule 3, line 14.... e Add lines 18a through 18d. These are your total other payments and refundable credits. 19 Add lines 17 and 18e. These are your total payments ......... efund If line 19 is more than line 16, subtract line 16 from line 19. This is the amount you overpaid ... 17 18a 180 18d 18e 19 8,300 20 20 1 Wages, salaries, tips, etc. Attach Form(s) W-2. 1 101,000 b 2a 2b 1,500 3b 4a 4b 4c 4d Taxable interest. Attach Sch. B 2a Tax-exempt interest .. 1,000 if required 3a Qualified dividends ... b Ordinary dividends. Attach Sch. B if required 4a IRA distributions ..... b Taxable amount... c Pensions and annuities d Taxable amount 5a Social security benefits b Taxable amount 6 Capital gain or loss). Attach Schedule D if required. If not required, check here... 7a Other income from Schedule 1, line 9 Add lines 1, 26, 36, 46, 4d, Sb, 6, and 7a. This is your total income sa Adjustments to income from Schedule 1, line 22. 5a 5b ndard Auction for- Single or Married filing separately, $12,200 Married filing jointly or Qualifying widow(er), $24,400 Head of household, $18,350 If you checked any box under Standard Deduction, see instructions. 6 7a 600 7b 103,100 5,000 8a Bb 98,100 9 24,400 b Subtract line 8a from line 76. This is your adjusted gross income 9 Standard deduction or itemized deductions (from Schedule A) 10 Qualified business income deduction. Attach Form 8995 or Form 8995-A. 11a Add lines 9 and 10. Taxable income. Subtract line 11a from line 8b. If zero or less, enter-O-. 10 11a 24,400 11b 73,700 19 19 8,300 Add lines 17 and 18e. These are your total payments 20 If line 19 is more than line 16, subtract line 16 from line 19. This is the amount you overpaid efund 20 0 22 23 23 21a Amount of line 20 you want refunded to you. If Form 8888 is attached, check here 21a ct deposit? Routing number c Type: Checking Savings instructions d Account number 22 Amount of line 20 you want applied to your 2020 estimated tax nount Amount you owe. Subtract line 19 from line 16. For details on how to pay, see instructions.. u Owe 24 Estimated tax penalty (see instructions). 24 ird Party Do you want to allow another person (other than your paid preparer) to discuss this return with Yes. Complete the IRS? See instructions below. -signee * No er than Designee's Phone Personal identification preparer) name number (PIN) gn 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 ere taxpayer) is based on all information of which preparer has any knowledge. Your signature Date Your occupation If the IRS sent you an Identity no. 00 volvo 160,725 204,100 32,748.50 + 32% 160,725 204,100 510,300 46,628.50 + 35% 204,100 510,300 153,798.50 + 37% 510,300 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- $0 $ 19,400 ...... 10% $ 0 19,400 78,950 $ 1,940.00 + 12% 19,400 78,950 168,400 9,086.00 + 22% 78,950 168,400 321,450 28,765.00 + 24% 168,400 321,450 408,200 65,497.00 + 32% 321,450 408,200 612,350 93,257.00 + 35% 408,200 612,350 164,709.50 + 37% 612,350 Ovo 160,700 204,100 31,322.00 + 32% 204,100 510,300 45,210.00 + 35% 510,300 152,380.00 + 37% Married filing separately-Schedule Y-2 If taxable income is: But not Over- over- The tax is: $ 9,700 ...... 10% 39,475 $ 970.00 + 12% 39,475 84,200 4,543.00 + 22% 84,200 160,725 14,382.50 + 24% 160,725 204,100 32,748.50 + 32% 204,100 306,175 46,628.50 + 35% 306,175 82,354.75 + 37% $ 0 9,700