John and Sandy Ferguson got married eight years ago and have a seven-year-old daughter, Samantha. In 2021, John worked as a computer technician at a local university earning a salary of $152,000, and Sandy worked part time as a receptionist for a law firm earning a salary of $29,000. John also does some Web design work on the side and reported revenues of $4,000 and associated expenses of $750. The Fergusons received $800 in qualified dividends and a $200 refund of their state income taxes. The Fergusons always itemize their deductions, and their itemized deductions were well over the standard deduction amount last year. Assume the Fergusons did not receive an advance payment for the 2021 individual recovery credit because they are not eligible for the credit. Use Exhibit 8-10, Tax Rate Schedule, Dividends and Capital Gains Tax Rates, 2021 AMT exemption for reference. The Fergusons reported making the following payments during the year: State income taxes of $4,400. Federal tax withholding of $21,000. Alimony payments to John's former wife of $10,000 (divorced 12/31/2014). Child support payments for John's child with his former wife of $4,100. $12,200 of real property taxes. Sandy was reimbursed $600 for employee business expenses she incurred. She was required to provide documentation for her expenses to her employer. $3,600 to Kid Care day care center for Samantha's care while John and Sandy worked. $14,000 interest on their home mortgage ($400,000 acquisition debt). $3,000 interest on a $40,000 home-equity loan. They used the loan to pay for a family vacation and new car. $15,000 cash charitable contributions to qualified charities. Donation of used furniture to Goodwill. The furniture had a fair market value of $400 and cost $2,000. Complete pages 1 and 2, Schedule 1, Schedule 2, and Schedule 3 of Form 1040 and Form 6251 for John and Sandy. John and Sandy Ferguson's address is 19010 N.W. 135th Street, Miami, FL 33054. Social security numbers: John (DOB 11/07/1970): 111-11-1111 Sandy (DOB 6/24/1972): 222-22-2222 Samantha (DOB 9/30/2016): 333-33-3333 Alimony recipient: 555-55-5555 1040 PG 1 1040 PG 2 Schedule 1 Schedule 2 Schedule 3 6251 PG 1 Form 1040 Schedule 1. SCHEDULE 1 (Form 1040) Additional Income and Adjustments to Income OMB No. 1545-0074 2020 Department of the Treasury Internal Revenue Service Name(s) shown on Form 1040, 1040-SR, ar 1040-NR Attach to Form 1040, 1040-SR, or 1040-NR. Go to www.irs.gov/Form1040 for instructions and the latest information. Attachment Sequence No. 01 Your social security number Parti 1 1 2a 22 b 3 3 Additional Income Taxable refunds, credits, or offsets of state and local income taxes Alimony received Date of original divorce or separation agreement (see instructions) Business income or loss). Attach Schedule Other gains or losses). Attach Farm 4797 Rental real estate, royalties, partnerships, Scorporations, trusts, etc. Attach Schedule E Farm income or loss). Attach Schedule F Unemployment compensation Other income. Amount 4 4 5 5 G 6 7 7 8 8 9 Part II 10 Combine lines 1 through 8. Enter here and on Form 1040, 1040-SR, or 1040-NR, line 8 Adjustments to Income Educator expenses 10 11 Certain business expenses of reservists, performing artists, and fee-basis government officials. Attach Form 2106 11 12 12 13 13 14 14 15 15 Health savings account deduction. Allach Farm 8889 Moving expenses for members of the Armed Forces. Attach Farm 3903 Deductible part of self-employment tax. Attach Schedule SE Self-employed SEP, SIMPLE, and qualified plans Self-employed health insurance deduction Penalty on early withdrawal of savings Alimony paid Recipient's SSN 16 16 17 17 18a 18a b C Date of original divorce or separation agreement (see instructions) 19 IRA deduction 19 20 20 Student loan interest deduction Tuition and fees deduction. Attach Farm 8917 21 21 22 Add lines 10 through 21. These are your adjustments to income. Enter here and an Form 1040, 1040-SR, or 1040-NR. line 10a 22 0 For Paperwork Reduction Act Notice, see your tax return Instructions. Cat. No. 71475F Schedule 1 (Form 1040)2020 THIS FORM IS A SIMULATION OF AN OFFICIAL U.S. TAX FORM. IT IS NOT THE OFFICIAL FORM ITSELF. DO NOT USE THIS FORM FOR TAX FILINGS OR FOR ANY PURPOSE OTHER THAN EDUCATIONAL. 2021 McGraw-Hill Education. John and Sandy Ferguson got married eight years ago and have a seven-year-old daughter, Samantha. In 2021, John worked as a computer technician at a local university earning a salary of $152,000, and Sandy worked part time as a receptionist for a law firm earning a salary of $29,000. John also does some Web design work on the side and reported revenues of $4,000 and associated expenses of $750. The Fergusons received $800 in qualified dividends and a $200 refund of their state income taxes. The Fergusons always itemize their deductions, and their itemized deductions were well over the standard deduction amount last year. Assume the Fergusons did not receive an advance payment for the 2021 individual recovery credit because they are not eligible for the credit. Use Exhibit 8-10, Tax Rate Schedule, Dividends and Capital Gains Tax Rates, 2021 AMT exemption for reference. The Fergusons reported making the following payments during the year: State income taxes of $4,400. Federal tax withholding of $21,000. Alimony payments to John's former wife of $10,000 (divorced 12/31/2014). Child support payments for John's child with his former wife of $4,100. $12,200 of real property taxes. Sandy was reimbursed $600 for employee business expenses she incurred. She was required to provide documentation for her expenses to her employer. $3,600 to Kid Care day care center for Samantha's care while John and Sandy worked. $14,000 interest on their home mortgage ($400,000 acquisition debt). $3,000 interest on a $40,000 home-equity loan. They used the loan to pay for a family vacation and new car. $15,000 cash charitable contributions to qualified charities. Donation of used furniture to Goodwill. The furniture had a fair market value of $400 and cost $2,000. Complete pages 1 and 2, Schedule 1, Schedule 2, and Schedule 3 of Form 1040 and Form 6251 for John and Sandy. John and Sandy Ferguson's address is 19010 N.W. 135th Street, Miami, FL 33054. Social security numbers: John (DOB 11/07/1970): 111-11-1111 Sandy (DOB 6/24/1972): 222-22-2222 Samantha (DOB 9/30/2016): 333-33-3333 Alimony recipient: 555-55-5555 1040 PG 1 1040 PG 2 Schedule 1 Schedule 2 Schedule 3 6251 PG 1 Form 1040 Schedule 1. SCHEDULE 1 (Form 1040) Additional Income and Adjustments to Income OMB No. 1545-0074 2020 Department of the Treasury Internal Revenue Service Name(s) shown on Form 1040, 1040-SR, ar 1040-NR Attach to Form 1040, 1040-SR, or 1040-NR. Go to www.irs.gov/Form1040 for instructions and the latest information. Attachment Sequence No. 01 Your social security number Parti 1 1 2a 22 b 3 3 Additional Income Taxable refunds, credits, or offsets of state and local income taxes Alimony received Date of original divorce or separation agreement (see instructions) Business income or loss). Attach Schedule Other gains or losses). Attach Farm 4797 Rental real estate, royalties, partnerships, Scorporations, trusts, etc. Attach Schedule E Farm income or loss). Attach Schedule F Unemployment compensation Other income. Amount 4 4 5 5 G 6 7 7 8 8 9 Part II 10 Combine lines 1 through 8. Enter here and on Form 1040, 1040-SR, or 1040-NR, line 8 Adjustments to Income Educator expenses 10 11 Certain business expenses of reservists, performing artists, and fee-basis government officials. Attach Form 2106 11 12 12 13 13 14 14 15 15 Health savings account deduction. Allach Farm 8889 Moving expenses for members of the Armed Forces. Attach Farm 3903 Deductible part of self-employment tax. Attach Schedule SE Self-employed SEP, SIMPLE, and qualified plans Self-employed health insurance deduction Penalty on early withdrawal of savings Alimony paid Recipient's SSN 16 16 17 17 18a 18a b C Date of original divorce or separation agreement (see instructions) 19 IRA deduction 19 20 20 Student loan interest deduction Tuition and fees deduction. Attach Farm 8917 21 21 22 Add lines 10 through 21. These are your adjustments to income. Enter here and an Form 1040, 1040-SR, or 1040-NR. line 10a 22 0 For Paperwork Reduction Act Notice, see your tax return Instructions. Cat. No. 71475F Schedule 1 (Form 1040)2020 THIS FORM IS A SIMULATION OF AN OFFICIAL U.S. TAX FORM. IT IS NOT THE OFFICIAL FORM ITSELF. DO NOT USE THIS FORM FOR TAX FILINGS OR FOR ANY PURPOSE OTHER THAN EDUCATIONAL. 2021 McGraw-Hill Education