James and Esther Johnson are husband and wife and file a joint return They live at 45678 S W 112th Street, Homestead, FL 33033 James, who is 67 years old (date of birth 12 14 1954), is retired and receiving social security benefits, and Esther, who is 66 years old (date of birth 6 11 1955), is also retired but working on a part time basis Their social security numbers are 412 34 5670 and 412 34 5671, respectively Annual social security income for James is $22,000 (SSA 1099, box 5) and for Esther is $13,800 (SSA 1099, box 5) Interest received by them from Central Bank is $2,545 (1099 INT, box 1) No income tax withholding was made Esther is an employee working part time as an interior decorator for Decorating House, a corporation Her Form W 2 shows the following information Wages $ 25,000 00 Federal W H $ 1856 00 Social security wages $ 25,000 00 Social security W H $ 1,550 00 Medicare wages $ 25,000 00 Medicare W H $ 362 50 Their itemized deductions are as follows Mortgage interest on their main home, $11847 Real estate taxes, $7,958 Personal property taxes, $426 Doctors' expenses unreimbursed by insurance, $6,681 Medical insurance premiums for the year, $2,900 Prescribed medicine, $1,995 Vitamins, $300 Total cash contributions to their church, $675 The contributions were made over the course of the year, and no individual contribution was greater than $250 Tax preparation fees for their 2020 return, $325, paid in 2021 Lottery tickets bought by Esther during the year, $750 Winnings received, $940 (W 2G, box 1) Income tax withholding on winnings, $35 (W 2G, box 4) Because the Johnsons live in Florida, where there is no state income tax, they will deduct the estimation of the general sales tax related to the area in which they live The most efficient way is to use the Sales Tax Calculator on the IRS website at https www irs gov Individuals Sales Tax Deduction Calculator A key point to remember in using the calculator is that income for this calculation also includes the nontaxable portion of social security benefits Required Prepare their individual income tax return using the appropriate forms and schedules 1040 PG 1 1040 PG 2 Schedule 1 Schedule A Schedule B SSB Worksheet They do not want to contribute to the presidential election campaign and do not want anyone to be a third party designee The Johnsons have not acquired any financial interest in virtual currency last year For any missing information, make reasonable assumptions

The Answer is in the image, click to view ...

Answered step by step

Verified Expert Solution

Link Copied!

Question

1 Approved Answer

Posted on Aug 17, 2024

James and Esther Johnson are husband and wife and file a joint return. They live at 45678 S.W. 112th Street, Homestead, FL 33033. James, who

James and Esther Johnson are husband and wife and file a joint return. They live at 45678 S.W. 112th Street, Homestead, FL 33033. James, who is 67 years old (date of birth 12/14/1954), is retired and receiving social security benefits, and Esther, who is 66 years old (date of birth 6/11/1955), is also retired but working on a part-time basis. Their social security numbers are 412-34-5670 and 412-34-5671, respectively.

Annual social security income for James is $22,000 (SSA-1099, box 5) and for Esther is $13,800 (SSA-1099, box 5).

Interest received by them from Central Bank is $2,545 (1099-INT, box 1). No income tax withholding was made.

Esther is an employee working part-time as an interior decorator for Decorating House, a corporation. Her Form W-2 shows the following information:

Wages =	$ 25,000.00
Federal W/H =	$ 1856.00
Social security wages =	$ 25,000.00
Social security W/H =	$ 1,550.00
Medicare wages =	$ 25,000.00
Medicare W/H =	$ 362.50

Their itemized deductions are as follows:

Mortgage interest on their main home, $11847.
Real estate taxes, $7,958.
Personal property taxes, $426.
Doctors' expenses unreimbursed by insurance, $6,681.
Medical insurance premiums for the year, $2,900.
Prescribed medicine, $1,995.
Vitamins, $300.
Total cash contributions to their church, $675. The contributions were made over the course of the year, and no individual contribution was greater than $250.
Tax preparation fees for their 2020 return, $325, paid in 2021.
Lottery tickets bought by Esther during the year, $750. Winnings received, $940 (W-2G, box 1). Income tax withholding on winnings, $35 (W-2G, box 4).

Because the Johnsons live in Florida, where there is no state income tax, they will deduct the estimation of the general sales tax related to the area in which they live. The most efficient way is to use the Sales Tax Calculator on the IRS website at https://www.irs.gov/Individuals/Sales-Tax-Deduction-Calculator. A key point to remember in using the calculator is that "income" for this calculation also includes the nontaxable portion of social security benefits.

Required:

Prepare their individual income tax return using the appropriate forms and schedules.

1040 PG 1
1040 PG 2
Schedule 1
Schedule A
Schedule B
SSB Worksheet

They do not want to contribute to the presidential election campaign and do not want anyone to be a third-party designee. The Johnsons have not acquired any financial interest in virtual currency last year. For any missing information, make reasonable assumptions.