Noah and Joan Arc's Tax Return
Noah and Joan Arc live with their family in Dayton, OH. Noah's Social Security number is 434-11-3311.Noah was born on February 22, 1984 and Joan was born on July 1, 1985. Both enjoy good health and eyesight. Noah owns and operates a pet store and Joan is a fire fighter for the city of Dayton.
1. The Arcs have two children, a son named Billie Bob (Social Security number 598-01-2345) born on March 21, 2012 and a daughter named Mary Sue (Social Security number 554-33-2411) born on December 3, 2015.
2. Joan and Noah brought a folder of tax documents located below.
3. Noah's pet store is located at 1415 S. Patterson Blvd., Dayton, OH 45409. The name of the store is "The Arc" and its taxpayer identification number is 95-9876556. Since you handle Noah's bookkeeping, you printed the income statement from your Quickbooks software, shown below.
4. Detail of The Arc's meals and entertainment:
5. Travel costs are business related and do not include meals.
6. Noah and Joan paid the following amounts during the year (all by check):
7. Noah has a long-term capital loss carryover from last year of $2,400
8. Noah and Joan own a condo and use it as a rental property. The condo is located at 16 Oakwood Ave, Unit A, Dayton, OH 45409. Noah provides the management services for the rental including selection of tenants, maintenance, repairs, rent collection, and other services as needed. On average, Noah spends about 2 hours per week on the rental activity. The revenue and expenses for the year are as follows:
9. The Arcs paid Ohio general sales tax of $976 during the year.
Required: You are to prepare the Arc's federal income tax return in good form, signing the return as the preparer. Do not complete an Ohio state income tax return. Make realistic assumptions about any missing data (addresses, etc.) that you need. The following forms and schedules are required:
Form 1040 Schedule SE
Schedule 1 Form 2441
Schedule 2 Form 4562
Schedule 3 Form 8812
Schedule A Form 8949
Schedule B Form 8995
Schedule C Child Tax Credit Worksheet
Schedule D Qualified Dividends and Capital Gain Tax Worksheet
Schedule E
Joan's W-2 Form:
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$ 400 60 Meals associated with business travel Overtime meals for employees Sports tickets for entertaining large customers 878 $ 1,338 $ 250 5,025 2,375 700 See Form 1098 (Below) Political Contributions Church donations (for which a written acknowledgment was received) Real estate taxes on their home Medical co-pay for doctor visits Mortgage interest for purchase of home Tax return preparation fees Credit card interest Automobile insurance premiums Uniforms for Joan Contribution to Noah's individual retirement account (made on April 1, 2020) 350 220 600 125 6,000 Rental Income $ 13,800 Insurance 575 Interest expense 6,870 Property taxes 1,016 Miscellaneous expenses 700 The home was acquired for $85,000 in 2003. No improvements have been made to the property. Visit the IRS website at rsefile www.irs.gov/efile 2 Federal income tax withheld a Employee's social security number Safe, accurate, IRS FAST! Use OMB No. 1545-0008 456-87-5432 b Employer identification number (EIN) 1 Wages, tips, other compensation 33-4382966 $30,240.00 c Employer's name, address, and ZIP code 3 Social security wages City of Dayton Fire and Rescue $30,240.00 123 Warren Street Phone Num # 5 Medicare wages and tips $30,240.00 7 Social security tips Dayton OH 45402 Country # d Control number 9 $5,120.00 4 Social security tax withheld $1,874.88 6 Medicare tax withheld $438.48 8 Allocated tips # 10 Dependent care benefits # 12a See instructions for box 12 DD $12,200.00 Last name Suff. 11 Nonqualified plans e Employee's first name and initial Joan 1265 Arc Phone Num # 13 Statutory employee Retirement plan Third-party sick pay 12b # W. Riverview Ave. Dayton 14 Other 12c 45402 Country OU # 12d # f Employee's address and ZIP code 15 State Employer's state ID number 1126-87021 20 Locality name 16 State wages, tips, etc. 17 State income tax $30.240.00 $1,850.00 18 Local wages, tips, etc. 19 Local income tax # # # # # # Wage and Tax Form Copy B-To Be Filed With Employee's FEDERAL Tax Return. This information is being furnished to the Internal Revenue Service. W-2 Statement Department of the Treasury - Internal Revenue Service 2019 Charlotte Squab Financial Services 123 Wall Street New York, NY 10005 Joan and Noah Arc 1265 W. Riverview Avenue Dayton, OH 45402 SSN: 456-87-5432 Date December 31, 2019 Substitute 1099 Statement Dividends Box 1a Ordinary Dividends Box 2a Cap Gain Distrib Box 6 Foreign Box 1b Ordinary Dividends Box 4 Federal Income Tas Withheld Tax Paid Box 10-Tax exempt Dividends Payor ExxonMobil 312.00 312.00 0.00 0.00 0.00 0.00 Texas Util. 1,188.00 1,188.00 0.00 0.00 0.00 0.00 CS Growth Fund 418.00 418.00 245.00 0.00 19.00 0.00 Stock Transactions Basis (reported to IRS) Deprecription Date Acq. Date Sold Proceeds 100 shs. Blue Corp. 02/11/2009 08/15/2019 4,537.00 2,576.00 50 shs. Yellow Corp. 01/13/2019 06/05/2019 6,090.00 5,345.00 25 shs. Red Co. 10/02/2010 10/07/2019 12.212.00 1,655.00 O VOID O CORRECTED RECIPIENT'S/LENDER'S name, street address, city or town, state or province, country, ZIP or foreign postal code, and telephone no. OMB No. 1545-1380 2019 Mortgage Interest Statement Chase Mortgage 100 Park Avenue New York, NY 10017 RECIPIENT'S/LENDER'S TIN Copy C For Recipient/ Lender PAYER'S/BORROWER'S TIN 434-11-3311 13-4296127 PAYER'S/BORROWER'S name Form 1098 1 Mortgage interest received from payer(s)/borrower(s) $ 11,100.00 2 Outstanding mortgage 3 Mortgage origination date principal $ 274,200.00 03/13/2010 4 Refund of overpaid 5 Mortgage insurance interest premiums $ $ 6 Points paid on purchase of principal residence $ 7 If address of property securing mortgage is the same as PAYER'S/BORROWER'S address, check the box, or enter the address or description in box 8. Noah and Joan Arc Street address (including apt. no.) For Privacy Act and Paperwork Reduction Act Notice, see the 2019 General Instructions for Certain Information Returns. 1265 W. Riverview Ave. City or town, state or province, country, and ZIP or foreign postal code 8 Address or description of property securing mortgage (see instructions) Dayton, OH 45402 9 Number of properties securing the 10 Other mortgage 1 11 Mortgage acquisition date Account number (see instructions) Form 1098 www.irs.gov/Form 1098 Department of the Treasury - Internal Revenue Service ROUNDUP DAY CARE CENTER 245 N. WILKISON STREET DAYTON, OH 45402 January 12, 2020 Joan and Noah Arc 1265 W. Riverview Avenue Dayton, OH 45402 Dear Joan and Noah, Thank you for a great 2019 at Roundup! We appreciate your patronage during the year and hope to continue to provide excellent service for Mary Sue in 2020. We have provided the tax information for calendar year 2019 below. Please let us know if you need any additional information. Sincerely, Charles F. Burgundian Charles F. Burgundian Executive Director, Roundup Day Care EIN 54-0983456 Date of service January 1, 2019 - December 31, 2019 Amount Paid $3,000.00 Child Mary Sue Arc $143,245.00 $0.00 $143,245.00 $62,328.00 $80,917.00 The Arc 95-9876556 Income Statement For the Year Ended December 31, 2019 Revenue: Gross Sales Less: Sales Returns and Allowances Net Sales Cost of Goods Sold: Beginning Inventory $10,204.00 Add: Purchases $62,111.00 $72,315.00 Less: Ending Inventory $9.987.00 Cost of Goods Sold Gross Profit (Loss) Expenses: Dues and Subscriptions $0.00 Estimated Federal Tax Payments $8,000.00 Estimated State Tax Payments $4,000.00 Insurance $780.00 Meals and Entertainment $1,338.00 Miscellaneous $0.00 Payroll Taxes $3,840.00 Professional Fees $1,700.00 Rent $8,400.00 Travel $1,231.00 Utilities $1,254.00 Vehicle Expenses $0.00 Wages $25,113.00 Total Expenses $55,656.00 Net Operating Income $25,261.00 $ 400 60 Meals associated with business travel Overtime meals for employees Sports tickets for entertaining large customers 878 $ 1,338 $ 250 5,025 2,375 700 See Form 1098 (Below) Political Contributions Church donations (for which a written acknowledgment was received) Real estate taxes on their home Medical co-pay for doctor visits Mortgage interest for purchase of home Tax return preparation fees Credit card interest Automobile insurance premiums Uniforms for Joan Contribution to Noah's individual retirement account (made on April 1, 2020) 350 220 600 125 6,000 Rental Income $ 13,800 Insurance 575 Interest expense 6,870 Property taxes 1,016 Miscellaneous expenses 700 The home was acquired for $85,000 in 2003. No improvements have been made to the property. Visit the IRS website at rsefile www.irs.gov/efile 2 Federal income tax withheld a Employee's social security number Safe, accurate, IRS FAST! Use OMB No. 1545-0008 456-87-5432 b Employer identification number (EIN) 1 Wages, tips, other compensation 33-4382966 $30,240.00 c Employer's name, address, and ZIP code 3 Social security wages City of Dayton Fire and Rescue $30,240.00 123 Warren Street Phone Num # 5 Medicare wages and tips $30,240.00 7 Social security tips Dayton OH 45402 Country # d Control number 9 $5,120.00 4 Social security tax withheld $1,874.88 6 Medicare tax withheld $438.48 8 Allocated tips # 10 Dependent care benefits # 12a See instructions for box 12 DD $12,200.00 Last name Suff. 11 Nonqualified plans e Employee's first name and initial Joan 1265 Arc Phone Num # 13 Statutory employee Retirement plan Third-party sick pay 12b # W. Riverview Ave. Dayton 14 Other 12c 45402 Country OU # 12d # f Employee's address and ZIP code 15 State Employer's state ID number 1126-87021 20 Locality name 16 State wages, tips, etc. 17 State income tax $30.240.00 $1,850.00 18 Local wages, tips, etc. 19 Local income tax # # # # # # Wage and Tax Form Copy B-To Be Filed With Employee's FEDERAL Tax Return. This information is being furnished to the Internal Revenue Service. W-2 Statement Department of the Treasury - Internal Revenue Service 2019 Charlotte Squab Financial Services 123 Wall Street New York, NY 10005 Joan and Noah Arc 1265 W. Riverview Avenue Dayton, OH 45402 SSN: 456-87-5432 Date December 31, 2019 Substitute 1099 Statement Dividends Box 1a Ordinary Dividends Box 2a Cap Gain Distrib Box 6 Foreign Box 1b Ordinary Dividends Box 4 Federal Income Tas Withheld Tax Paid Box 10-Tax exempt Dividends Payor ExxonMobil 312.00 312.00 0.00 0.00 0.00 0.00 Texas Util. 1,188.00 1,188.00 0.00 0.00 0.00 0.00 CS Growth Fund 418.00 418.00 245.00 0.00 19.00 0.00 Stock Transactions Basis (reported to IRS) Deprecription Date Acq. Date Sold Proceeds 100 shs. Blue Corp. 02/11/2009 08/15/2019 4,537.00 2,576.00 50 shs. Yellow Corp. 01/13/2019 06/05/2019 6,090.00 5,345.00 25 shs. Red Co. 10/02/2010 10/07/2019 12.212.00 1,655.00 O VOID O CORRECTED RECIPIENT'S/LENDER'S name, street address, city or town, state or province, country, ZIP or foreign postal code, and telephone no. OMB No. 1545-1380 2019 Mortgage Interest Statement Chase Mortgage 100 Park Avenue New York, NY 10017 RECIPIENT'S/LENDER'S TIN Copy C For Recipient/ Lender PAYER'S/BORROWER'S TIN 434-11-3311 13-4296127 PAYER'S/BORROWER'S name Form 1098 1 Mortgage interest received from payer(s)/borrower(s) $ 11,100.00 2 Outstanding mortgage 3 Mortgage origination date principal $ 274,200.00 03/13/2010 4 Refund of overpaid 5 Mortgage insurance interest premiums $ $ 6 Points paid on purchase of principal residence $ 7 If address of property securing mortgage is the same as PAYER'S/BORROWER'S address, check the box, or enter the address or description in box 8. Noah and Joan Arc Street address (including apt. no.) For Privacy Act and Paperwork Reduction Act Notice, see the 2019 General Instructions for Certain Information Returns. 1265 W. Riverview Ave. City or town, state or province, country, and ZIP or foreign postal code 8 Address or description of property securing mortgage (see instructions) Dayton, OH 45402 9 Number of properties securing the 10 Other mortgage 1 11 Mortgage acquisition date Account number (see instructions) Form 1098 www.irs.gov/Form 1098 Department of the Treasury - Internal Revenue Service ROUNDUP DAY CARE CENTER 245 N. WILKISON STREET DAYTON, OH 45402 January 12, 2020 Joan and Noah Arc 1265 W. Riverview Avenue Dayton, OH 45402 Dear Joan and Noah, Thank you for a great 2019 at Roundup! We appreciate your patronage during the year and hope to continue to provide excellent service for Mary Sue in 2020. We have provided the tax information for calendar year 2019 below. Please let us know if you need any additional information. Sincerely, Charles F. Burgundian Charles F. Burgundian Executive Director, Roundup Day Care EIN 54-0983456 Date of service January 1, 2019 - December 31, 2019 Amount Paid $3,000.00 Child Mary Sue Arc $143,245.00 $0.00 $143,245.00 $62,328.00 $80,917.00 The Arc 95-9876556 Income Statement For the Year Ended December 31, 2019 Revenue: Gross Sales Less: Sales Returns and Allowances Net Sales Cost of Goods Sold: Beginning Inventory $10,204.00 Add: Purchases $62,111.00 $72,315.00 Less: Ending Inventory $9.987.00 Cost of Goods Sold Gross Profit (Loss) Expenses: Dues and Subscriptions $0.00 Estimated Federal Tax Payments $8,000.00 Estimated State Tax Payments $4,000.00 Insurance $780.00 Meals and Entertainment $1,338.00 Miscellaneous $0.00 Payroll Taxes $3,840.00 Professional Fees $1,700.00 Rent $8,400.00 Travel $1,231.00 Utilities $1,254.00 Vehicle Expenses $0.00 Wages $25,113.00 Total Expenses $55,656.00 Net Operating Income $25,261.00
