Note This problem is for the 2018 tax year Jane Smith, age 40, is single and has no dependents She is employed as a legal secretary by Legal Services, Inc She owns and operates Typing Services located near the campus of Florida Atlantic University at 1986 Campus Drive, Boca Raton, FL 33434 Jane is a material participant in the business She is a cash basis taxpayer Jane lives at 2020 Oakcrest Road, Boca Raton, FL 33431 Jane's Social Security number is 123 45 6781 Jane indicates that she wants to designate $3 to the Presidential Election Campaign Fund Jane had health insurance for all months of 2018 During 2018, Jane had the following income and expense items a $100,000 salary from Legal Services, Inc b $20,000 gross receipts from her typing services business c $700 interest income from Third National Bank d $1,000 Christmas bonus from Legal Services, Inc e $60,000 life insurance proceeds on the death of her sister f $5,000 check given to her by her wealthy aunt g $100 won in a bingo game h Expenses connected with the typing service Office rent $7,000 Supplies 4,400 Utilities and telephone 4,680 Wages to part time typists 5,000 Payroll taxes 500 Equipment rentals 3,000 i $9,500 interest expense on a home mortgage (paid to San Jose Savings and Loan) j $15,000 fair market value of silverware stolen from her home by a burglar on October 12, 2018 Jane had paid $14,000 for the silverware on July 1, 2008 She was reimbursed $10,000 by her insurance company k Jane had loaned $2,100 to a friend, Joan Jensen, on June 3, 2014 Joan declared bankruptcy on August 14, 2018, and was unable to repay the loan Assume that the loan is a bona fide debt l Legal Services, Inc , withheld Federal income tax of $15,000 and the appropriate amount of FICA tax from her wages m Alimony of $10,000 received from her former husband, Ted Smith divorce was finalized in 2012, and no changes have been made to the divorce decree since that time n Interest income of $800 on City of Boca Raton bonds o Jane made estimated Federal tax payments of $2,000 p Sales taxes from the sales tax table of $953 q Property taxes on her residence of $3,200 r Charitable contribution of $2,500 to her alma mater, Citrus State College s On November 1, 2018, Jane was involved in an automobile accident At the time of the accident, Jane's automobile had an FMV of $45,000 After the accident, the automobile's FMV was $38,000 Jane acquired the car at a cost of $52,000 Jane's car was covered by insurance, but because the policy had a $5,000 deduction clause, Jane decided not to file a claim for the damage Required Compute Jane Smith's 2018 Federal income tax payable (or refund due) Use Form 1040, Schedule 1, Schedule 5, Schedule A, Schedule C, Schedule D and Form 8949 Make realistic assumptions about any missing data If an amount box does not require an entry or the answer is zero, enter 0 Enter all amounts as positive numbers However, unless instructed otherwise, use the minus sign to indicate a loss It may be necessary to complete the tax schedules before completing Form 1040 When computing the tax liability, do not round your immediate calculations If required round your final answers to the nearest dollar OMB No 1545 0074 Other Payments and Refundable Credits SCHEDULE 5 (Form 1040) Department of the Treasury Internal Revenue Service 2018 Attach to Form 1040 Attachment Go to www irs gov Form1040 for instructions and the latest information Sequence No 05 Name(s) shown on Form 1040 Jane Smith Your social security number 123 45 6781 Other 65 Reserved 65 66 2018 estimated tax payments and amount applied from 2017 return 66 Payments and 67a Reserved 67a Refundable b Reserved 67b Credits 68 69 Reserved 68 69 70 Net premium tax credit Attach Form 8962 70 71 Amount paid with request for extension to file (see instructions) 71 72 Excess social security and tier 1 RRTA tax withheld 72 73 Credit for federal tax on fuels Attach Form 4136, 73 74 Credits from Form a o 2439 b 0 Reserved CO 8885 do 74 75 Add the amounts in the far right column These are your total other payments and refundable credits Enter here and include on Form 1040, line 17 75 BAA For Paperwork Reduction Act Notice, see your tax return instructions Schedule 5 (Form 1040) 2018

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Note: This problem is for the 2018 tax year. Jane Smith, age 40, is single and has no dependents. She is employed as a legal

Note: This problem is for the 2018 tax year.

Jane Smith, age 40, is single and has no dependents. She is employed as a legal secretary by Legal Services, Inc. She owns and operates Typing Services located near the campus of Florida Atlantic University at 1986 Campus Drive, Boca Raton, FL 33434. Jane is a material participant in the business. She is a cash basis taxpayer. Jane lives at 2020 Oakcrest Road, Boca Raton, FL 33431. Jane's Social Security number is 123-45-6781. Jane indicates that she wants to designate $3 to the Presidential Election Campaign Fund. Jane had health insurance for all months of 2018. During 2018, Jane had the following income and expense items:

$100,000 salary from Legal Services, Inc.

$20,000 gross receipts from her typing services business.

$700 interest income from Third National Bank.

$1,000 Christmas bonus from Legal Services, Inc.

$60,000 life insurance proceeds on the death of her sister.

$5,000 check given to her by her wealthy aunt.

$100 won in a bingo game.

Expenses connected with the typing service:

Office rent	$7,000
Supplies	4,400
Utilities and telephone	4,680
Wages to part-time typists	5,000
Payroll taxes	500
Equipment rentals	3,000

$9,500 interest expense on a home mortgage (paid to San Jose Savings and Loan).

$15,000 fair market value of silverware stolen from her home by a burglar on October 12, 2018. Jane had paid $14,000 for the silverware on July 1, 2008. She was reimbursed $10,000 by her insurance company.

Jane had loaned $2,100 to a friend, Joan Jensen, on June 3, 2014. Joan declared bankruptcy on August 14, 2018, and was unable to repay the loan. Assume that the loan is a bona fide debt.

Legal Services, Inc., withheld Federal income tax of $15,000 and the appropriate amount of FICA tax from her wages.

Alimony of $10,000 received from her former husband, Ted Smith; divorce was finalized in 2012, and no changes have been made to the divorce decree since that time.

Interest income of $800 on City of Boca Raton bonds.

Jane made estimated Federal tax payments of $2,000.

Sales taxes from the sales tax table of $953.

Property taxes on her residence of $3,200.

Charitable contribution of $2,500 to her alma mater, Citrus State College.

On November 1, 2018, Jane was involved in an automobile accident. At the time of the accident, Jane's automobile had an FMV of $45,000. After the accident, the automobile's FMV was $38,000. Jane acquired the car at a cost of $52,000. Jane's car was covered by insurance, but because the policy had a $5,000 deduction clause, Jane decided not to file a claim for the damage.

Required:

Compute Jane Smith's 2018 Federal income tax payable (or refund due). Use Form 1040, Schedule 1, Schedule 5, Schedule A, Schedule C, Schedule D and Form 8949.

Make realistic assumptions about any missing data.
If an amount box does not require an entry or the answer is zero, enter "0".
Enter all amounts as positive numbers. However, unless instructed otherwise, use the minus sign to indicate a loss.
It may be necessary to complete the tax schedules before completing Form 1040.
When computing the tax liability, do not round your immediate calculations. If required round your final answers to the nearest dollar

image text in transcribed

OMB No. 1545-0074 Other Payments and Refundable Credits SCHEDULE 5 (Form 1040) Department of the Treasury Internal Revenue Service 2018 Attach to Form 1040. Attachment Go to www.irs.gov/Form1040 for instructions and the latest information. Sequence No.05 Name(s) shown on Form 1040 Jane Smith Your social security number 123-45-6781 Other 65 Reserved 65 66 2018 estimated tax payments and amount applied from 2017 return 66 Payments and 67a Reserved 67a Refundable b Reserved 67b Credits 68-69 Reserved 68-69 70 Net premium tax credit. Attach Form 8962 .. 70 71 Amount paid with request for extension to file (see instructions). 71 72 Excess social security and tier 1 RRTA tax withheld 72 73 Credit for federal tax on fuels. Attach Form 4136, 73 74 Credits from Form: a o 2439 b 0 Reserved CO 8885 do 74 75 Add the amounts in the far right column. These are your total other payments and refundable credits. Enter here and include on Form 1040, line 17 75 BAA For Paperwork Reduction Act Notice, see your tax return instructions. Schedule 5 (Form 1040) 2018