Question
Michael Jordan (birthdate March 1, 1975) is a single taxpayer. Michaels earnings and withholdings as a departmental manager for 2020 are reported on his Form
Michael Jordan (birthdate March 1, 1975) is a single taxpayer. Michaels earnings and withholdings as a departmental manager for 2020 are reported on his Form W-2:
Michaels other income includes interest on a savings account at Chase National Bank of $13,680.
Michael pays his ex-wife, Juanita Vanoy, $3,800 per month in accordance with their April 19, 2013 divorce decree. When their 2-year-old child (in the ex-wifes custody) reaches the age of 18, the payments are reduced to $2,700 per month. His ex-wifes Social Security number is 594-22-1234.
In 2020, John purchased a new car and so he kept track of his sales tax receipts during the year. His actual sales tax paid is $3,701, which exceeds the estimated amount per the IRS tables.
Michael participates in a high-deductible health plan and is eligible to contribute to a health savings account. His HSA earned $85 in 2020.
During the year, Michael paid the following amounts (all of which can be substantiated):
Interest on American Express credit Card $1,761
Automobile loan interest 4,200
Insurance for Family car 910
IRA Contributions 6,250
Personal residence property taxes 2,795
HSA Contributions 2,825
Fee to get Income Tax return prepared 850
Contribution to the Red Cross (Charitable, Cash) 1,320
Contribution to the Familys Church (Cash) 3,310
The Democratic Political Party (Contribution, cash) 275
The Metropolitan Opera Dinner Fund Raiser
Value of dinner is $30 130
Required: Complete Michaels federal tax return for 2020. Use Form 1040, Schedule 1, Schedule A, Schedule B, and Form 8889 to complete this tax return. Make realistic assumptions about any missing data. After completion of Michaels federal tax return, please answer the following questions: A Tax Rate Schedule is included below for the calculation of Mr. Jordans taxes.
1. What is the adjusted gross income (line 11) _______________________
2. What are the total standard or itemized deductions (line 12) ______________
3. What is the taxable income (line 15) ____________________________
4. What is Tax (line 16) ___________________________
5. Amount overpaid (line34) _____________________________ OR
6. Amount you owe (Line 37) _______________________________
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