INSTRUCTIONS: WITH THE INFORMATION PROVIDED COMPLETE FORM 1040, SCHEDULE 1, SCHEDULE 2, SCHEDULE 3, SCHEDULE A, SCHEDULE B, SCHEDULE C, SCHEDULE H, SCHEDULE SE, FORM 7202, FORM 8995, AND FORM 8960.

PLEASE DO NOT USE THE ANSWER THAT WAS FOR ANOTHER QUESTION THAT HAS DIFFERENT VALUES! I POSTED THIS ALREADY AND SOMEONE REPLIED WITH AN ANSWER THAT WAS COPIED FROM ANOTHER QUESTION THAT HAD DIFFERENT VALUES THAN MINE!

Richard McCarthy (born 2/14/1966; Social Security number 100-10-9090) and Christine McCarthy (born 6/1/1968; Social security number 101-21-3434) have a 19-year-old son Jack, (born 10/2/2001; Social Security number 555-55-1212), who is a full-time student at the University of Key West. The McCarthys also have a 12-year-old daughter Justine, (Social Security number 444-23-1212), who lives with them. The McCarthys can claim a $2,000 child tax credit for Justine and a $500 other dependent credit for Jack. The McCarthys did not receive an EIP in 2021. Richard is the CEO at a paper company.

His 2021 Form W-2 is provided.

Employee's social security number

100-10-9090

Wages, tips, other compensation 231,000.00

Federal income tax withheld 55,820.00

Employer's name, address, and ZIP code

Mufflin-Dunder Paper

302 Lackawanna Ave.

Scranton, PA 185033

Social security wages 142,800

Social security tax withheld 8,853.60

Medicare wages and tips 236,000

Medicare tax withheld 3,422

Christine is an optometrist and operates her own practice ("The Eyes of March") in town as a sole proprietor. The shop address is 1030 Morgan Highway, Clarks Summit, PA 18411 and the business code is 621320. Christine keeps her books on the accrual basis and her bookkeeper provided the following information

Gross Sales		270,000
Returns		8,250
Inventory:
Beginning Inventory	25,000
Purchases	122,000
Ending Inventory	30,000
Rent		24,000
Insurance		11,500
Professional fees		3,200
Payroll		34,500
Payroll Taxes		2,777
Utilities		4,000
Office expenses		1,995
Depreciation		5,000

Christine came into contact with a client that had COVID and was unable to work for 14 days under orders of state health officials. Her employees were unaffected. She also elected to defer self-employment taxes (but not household taxes) under the COVID provisions. Her employees were unaffected. Her 2020 net earnings from self-employment were 45,212

The McCarthys have a nanny/housekeeper whom they paid $12,600 during 2021. They did not withhold income or FICA taxes. The McCarthys paid Pennsylvania state unemployment tax of $378 in 2021.

Christine received a 2021 Form 1099-INT from the National Bank of Scranton that listed interest income of $23,500. Note that McCarthys reasonably allocate $751 to state income tax expense for purposes of the net investment income tax.

The McCarthys received a Form 1099-G from Pennsylvania that reported a $477 state income tax refund from 2020. The McCarthys filed a Schedule A in 2019 and had $14,223 of state income tax expense that was limited to a $10,000 deduction.

The McCarthys paid the following in 2021:

Home mortgage interest reported on Form 1098 on mortgage of less than 750,000	15,625
Property taxes	5,500
Estimated state income tax payments	2,400
Estimated federal income tax payments	4,500
Charitable contributions (all cash)	7,600
Student loan interest	2,690

INSTRUCTIONS: WITH THE INFORMATION PROVIDED COMPLETE FORM 1040, SCHEDULE 1, SCHEDULE 2, SCHEDULE 3, SCHEDULE A, SCHEDULE B, SCHEDULE C, SCHEDULE H, SCHEDULE SE, FORM 7202, FORM 8995, AND FORM 8960 to complete this tax return. Ignore any alternative minimum tax. Do not complete Form 4952, which is used for depreciation. Make realistic assumptions about any missing data. The taxpayers had health insurance coverage for the entire year and do not want to contribute to the presidential election campaign. Enter all amounts as positive numbers. If an amount box does not require an entry or the answer is zero, enter "0". If required, round any dollar amount to the nearest dollar.