Magdalena Schmitz has undergone some major changes in her life recently. In 2017, at the age of 46, her husband, Roger, passed away. Magdalena has not remarried as of the end of 2019. Magdalena currently lives in Bedford, Pennsylvania. She was living in Pittsburgh when her husband passed away but she moved back to her childhood home so she could get help from her family raising her children. Magdalena was employed in Pittsburgh early in the year but left that job and relocated 100 miles away to pursue a new life and start her new job. Magdalena has three children (ages as of the end of the year): Alyssa (23), Tyler (16), and Connor (11). Magdalena would like to determine her federal income tax under the filing status that is most advantageous for her.

Magdalena reported the following information:

• Magdalenas social security number is 294-83-2845
• Alyssas social security number is 824-84-8456
• Tylers social security number is 824-34-9584
• Connors social security number is 824-56-2984
• Magdalenas mailing address is 623 S. Liberty Road Bedford, Pennsylvania 15522

Alyssa is unmarried and a full-time graduate student at Pennsylvania State University (PSU) (EIN 33-9876543). PSUs address is 1250 Happy Valley, State College, PA 16801. She received her bachelors degree the year her father passed away. This year represents her fifth year of full-time higher education schooling. Alyssa works part-time in State College to help with some of her living expenses. Alyssa earned $2,300 in gross income during the year and had her income tax return prepared on campus by Volunteer Income Tax Assistance (VITA) volunteers. Magdalena provided support for Alyssa including paying for rent, books, tuition, food, clothes, medicine, and other support items. In total, Magdalena provided $12,700 of support for the year. PSU provided Alyssa with a Form 1098-T at year end.

Alyssas higher education expenses for her university studies were as follows:

Tuition $6,500

Books $2,000

In order to permit Magdalena to maintain a full-time job, she sends Connor to a day care program after school five days a week. During the year, Magdalena paid the day care operator $4,250 for Connors care.

The day care details are as follows:

Horizon Day Care

452 S. Patriot Road

Bedford, PA 15522

EIN-43-6598324

Magdalena incurred the following moving-related expenses during the year:

Transport of household items $3,200

Meals in transit 150

House hunting trip 1,350

In addition, she drove her car the 100 miles to Bedford as part of the move. Her previous workplace was located 10 miles from the previous home she was renting and her new job is exactly 100 miles away from her prior residence.

Magdalenas W-2s for the year reported the following:

Employer	Gross Wages	Federal Income Tax Withholding	State Income Tax Withholding
Juniata Development Corporation	$98,435	$11,900	$3,700
Pittsburgh Real Estate	$22,450	$2200	$1,850

Magdalenas employers withheld all applicable and appropriate payroll taxes. The entire Schmitz family was covered by minimum essential health insurance during each month in 2019. The insurance was provided by Magdalenas employers.

On January 1, 2018 (prior year), Magdalena started a photography business in which she takes bridal and wedding photographs. She does not do any of the professional printing. However, she provides all of the digital files to her clients on a password-protected web site as part of her service. This unique service, along with her skill and reputation, has allowed her to earn additional money on the weekends, primarily in the summer, to help support her daughter in college. Magdalena rents all of the camera equipment from a friend and does not currently own any equipment herself. The photography business uses the cash method of accounting. The business did not have any obligation to file a Form 1099 to any payee during the year. Magdalena reported the following revenue and expenses for her business for the year:

Gross Revenue $16,500

Photographic supplies $ 430

Camera rental $1,050

Web site hosting fee $ 200

Magdalena also received the following during the year:

Life Insurance Payment-Mutual Life (Mothers passing) $150,000

Cash gift from her father $ 5,000

Interest income-First Bank of Bedford $ 310

Interest income-General Electric Bond $ 3,200

Interest income-Bedford School District Municipal Bond $ 2,500

Interest income-Johnstown Rural Improvement District Bond $ 1,300

PA state income tax refund* $ 325

*Refund was from state tax she paid last year. Magdalena deducted all of her state taxes as itemized deductions, and received full tax benefit for the deductions, on her prior year federal tax return.

Magdalena did not own, control or manage any foreign bank accounts, nor was she a grantor or beneficiary of a foreign trust during the tax year.

Magdalena paid or incurred the following expenses during the year:

Dentist (unreimbursed by insurance) $1,500

Doctors (unreimbursed by insurance) $ 475

Prescriptions (unreimbursed by insurance) $ 255

Real property taxes on residence $ 4,950

Vehicle registration fee based upon age of vehicle $ 175

Mortgage interest on principal residence (Form 1098 received) $6,845

Contribution to the American Lung Association $ 600

Contribution to the Habitat for Humanity $1,000

Contribution to Methodist Church of PA $3,000

Contribution to Penn State University $ 400

Instructions:

You are going to prepare the 2019 federal tax return for your client. Include form 1040 and other relevant schedules and forms.