Note: This problem is for the 2019 tax year.

Alfred E. Old and Beulah A. Crane, each age 42, married on September 7, 2017. Alfred and Beulah will file a joint return for 2019. Alfred's Social Security number is 111-11-1109. Beulah's Social Security number is 123-45-6780, and she adopted "Old" as her married name. They live at 211 Brickstone Drive, Atlanta, GA 30304.

Alfred was divorced from Sarah Old in March 2016. Under the divorce agreement, Alfred is to pay Sarah $1,250 per month for the next 10 years or until Sarah's death, whichever occurs first. Alfred pays Sarah $15,000 in 2019. In addition, in January 2019, Alfred pays Sarah $50,000, which is designated as being for her share of the marital property. Also, Alfred is responsible for all prior years' income taxes. Sarah's Social Security number is 123-45-6788.

Alfred's salary for 2019 is $150,000. He is an executive working for Cherry, Inc. (Federal I.D. No. 98-7654321). As part of his compensation package, Cherry provides him with group term life insurance equal to twice his annual salary. His employer withheld $24,900 for Federal income taxes and $8,000 for state income taxes. The proper amounts were withheld for FICA taxes.

Beulah recently graduated from law school and is employed by Legal Aid Society, Inc. (Federal I.D. No. 11-1111111), as a public defender. She receives a salary of $42,000 in 2019. Her employer withheld $7,500 for Federal income taxes and $2,400 for state income taxes. The proper amounts were withheld for FICA taxes.

Alfred and Beulah had interest income of $500. Alfred and Beulah receive a $1,900 refund on their 2018 state income taxes. They claimed the standard deduction on their 2018 Federal income tax return. Alfred and Beulah pay $4,500 interest and $1,450 property taxes on their personal residence in 2019. Their charitable contributions total $2,400 (all to their church). They paid sales taxes of $1,400, for which they maintain the receipts. Both spouses had health insurance for all of 2019 and they do not want to contribute to the Presidential Election Campaign.

Required:

Compute the Olds' net tax payable (or refund due) for 2019. Use Form 1040 and Schedule 1 to complete tax return.

• It may be necessary to complete the tax schedule and worksheet before completing Form 1040.
• Enter all amounts as positive numbers.
• If an amount box does not require an entry or the answer is zero, enter "0".
• Make realistic assumptions about any missing data.
• When computing the tax liability, do not round your immediate calculations. If required round your final answers to the nearest dollar.
• Use the 2019 Tax Rate Schedule provided. Do not use the Tax Tables.

1040 Department of the Treasury --Internal Revenue Service 199) U.S. Individual Income Tax Return 2019 OMB No 1545-0074 IRS Use Only-Do not write or sale in this space Filing Status Single Married filing jointly Married filing separately (MFS) Head of household (HOH) Qualifying widowler (0) Check only If you checked the MFS box, enter the name of spouse. If you checked the HOH or Gw box, enter the child's name it the qualitying person is a child but not your dependent Your first name and middle initial Last name Your social security number one box If joint retum, spouse's first name and middle initial Last name Spouse's social security number Home address number and street). If you have a P.O. box, see instructions. Apt. no. Presidential Election Campaign Check here you, or your spouselling only want to go to this fund. City, town or post office, state, and ZIP code. If you have a foreign address, also complete spaces below (see instructions Checking a box below will not change your tax or refund You Spouse Foreign country name Foreign province/stata/county Foreign postal code of more than four dependents, see instructions and here Standard Someone can claime You as a dependent Your spouse as a dependent Deduction Spouse itemizes on a separate return or you were a dual-status alien Age/Blindness You Were born before January 2, 1956 Are bind Spouse: Was born before January 2, 1955 is blind Dependents (see instructions): (2) Social security number (3) Relationship to you (if qualifies for instructions (1) First name Last name Child tax credit Credit for other dependents ZU 1 2b 3b 4b 4d Sb 6 7a 1 Wages, salaries, tips, etc. Attach Formis) W-2 2a Tax-exempt interest 2a b Taxable interest. Attach Sch. B if required 3a Qualified dividends. 3a b Ordinary dividends. Attach Sch. B if required Standard Deduction for 4a IRA distributions. 4a b Taxable amount Single Marie Sing separately. C Pensions and annuities 4c d Taxable amount $12.200 Sa Social security benefits Sa b Taxable amount Married fling intly or Qualitying Capital gain or loss. Attach Schedule D it required. If not required, check here widow 7a Other income from Schedule 1, line 9 $24.400 - Head of b Add lines 1, 2, 3, 4b, dd, Sb, 6 and 7a. This is your total income household 8a Adjustments to income from Schedule 1, line 22 $18.350 f you checked b Subtract line 8a from line 7b. This is your adjusted gross income any box under 9 9 Standard Standard deduction or itemized deductions from Schedule A) Deduction 10 Qualified business income deduction. Attach Form 8995 or Form 8996-A 10 se instructions 11a Add lines 9 and 10 - b Taxable income. Subtract line 11a from line 8 For Disclosure, Privacy Act, and Paperwork Reduction Act Notice, see separate instructions Cat. No. 113206 7b 8a Bb 11a 11b Form 1040 0019 Form 1040 (2019) Lance H. and Wanda B. Dean 123-45-6786 Page 2 12a 12a Tax (see inst.) Check if any from Form(s): 1 8814 2 - 4972 3 b Add Schedule 2, line 3, and line 122 and enter the total .. 12b 13a 13a 13b Child tax credit or credit for other dependents b Add Schedule 3, line 7, and line 13a and enter the total .. Subtract line 13b from line 12b. If zero or less, enter -o- . 15 Other taxes, including self-employment tax, from Schedule 2, line 10 14 14 15 16 Add lines 14 and 15. This is your total tax 16 17 Federal income tax withheld from Forms W-2 and 1099 17 18 If you have a qualifying child, attach Sch. EIC. Other payments and refundable credits: a Earned income credit (EIC). 18a 18b qualifying child, attach Sch. EIC. If you have nontaxable combat pay, see instructions. 18c 18d 18e 19 19 a Earned income credit (EIC). 18a b Additional child tax credit. Attach Schedule 8812 c American opportunity credit from Form 8863, line 8 d Schedule 3, line 14..... e Add lines 18a through 18d. These are your total other payments and refundable credits ....... Add lines 17 and 18e. These are your total payments If line 19 is more than line 15, subtract line 15 from line 19. This is the amount you overpaid Amount of line 20 you want refunded to you. If Form 8888 is attached, check here Routing number -c Type: - Checking - Savings Account number 1 Amount of line 20 you want applied to your 2020 estimated 20 Refund 20 21a 21a Direct deposit? See instructions. d 22 tax ...... 22 23 Amount Amount you owe. Subtract line 19 from line 16. For details on how to pay, see instructions.. 23 OMB No. 1545-0074 SCHEDULE 1 (Form 1040 or 1040-SR) Additional Income and Adjustments to Income Department of the Treasury Attach to Form 1040 or 1040-SR. Internal Revenue Service Go to www.irs.gov/Form1040 for instructions and the latest information. Name(s) shown on Form 1040 or 1040-SR 2019 Attachment Sequence No. 01 Your social security number AS a 9 At any time during 2019, did you receive, sell, send, exchange, or otherwise acquire any financial interest in any virtual currency? Yes No Partl Additional Income 1 Taxable refunds, credits, or offsets of state and local income taxes 2a Alimony received 2a b Date of original divorce or separation agreement (see instructions) 3 Business income or (loss). Attach Schedule C 3 4 Other gains or losses). Attach Form 4797 4 5 Rental real estate, royalties, partnerships, S corporations, trusts, etc. Attach Schedule E 5 6 Farm income or (loss). Attach Schedule F 6 Unemployment compensation 7 8 Other income. List type and amount 8 Combine lines 1 through 8. Enter here and on Form 1040 or 1040-SR, line 7a Part II Adjustments to Income 10 Educator expenses 10 11 Certain business expenses of reservists, performing artists, and fee-basis government officials. Attach Form 2106 11 12 Health savings account deduction. Attach Form 8889 12 13 Moving expenses for members of the Armed Forces. Attach Form 3903 13 14 Deductible part of self-employment tax. Attach Schedule SE 14 15 Self-employed SEP, SIMPLE, and qualified plans 15 16 Self-employed health insurance deduction 16 17 Penalty on early withdrawal of savings 17 18a Alimony paid 18a b Recipient's SSN c Date of original divorce or separation agreement (see instructions) 19 IRA deduction 19 20 Student loan interest deduction 20 21 Reserved for future use 21 22 Add lines 10 through 21. These are your adjustments to income. Enter here and on Form 1040 or 1040-SR, line 8a 22 For Paperwork Reduction Act Notice, see your tax return instructions. Cat. No. 71479F Schedule 1 (Form 1040 or 1040-SR) 2019 1040 Department of the Treasury --Internal Revenue Service 199) U.S. Individual Income Tax Return 2019 OMB No 1545-0074 IRS Use Only-Do not write or sale in this space Filing Status Single Married filing jointly Married filing separately (MFS) Head of household (HOH) Qualifying widowler (0) Check only If you checked the MFS box, enter the name of spouse. If you checked the HOH or Gw box, enter the child's name it the qualitying person is a child but not your dependent Your first name and middle initial Last name Your social security number one box If joint retum, spouse's first name and middle initial Last name Spouse's social security number Home address number and street). If you have a P.O. box, see instructions. Apt. no. Presidential Election Campaign Check here you, or your spouselling only want to go to this fund. City, town or post office, state, and ZIP code. If you have a foreign address, also complete spaces below (see instructions Checking a box below will not change your tax or refund You Spouse Foreign country name Foreign province/stata/county Foreign postal code of more than four dependents, see instructions and here Standard Someone can claime You as a dependent Your spouse as a dependent Deduction Spouse itemizes on a separate return or you were a dual-status alien Age/Blindness You Were born before January 2, 1956 Are bind Spouse: Was born before January 2, 1955 is blind Dependents (see instructions): (2) Social security number (3) Relationship to you (if qualifies for instructions (1) First name Last name Child tax credit Credit for other dependents ZU 1 2b 3b 4b 4d Sb 6 7a 1 Wages, salaries, tips, etc. Attach Formis) W-2 2a Tax-exempt interest 2a b Taxable interest. Attach Sch. B if required 3a Qualified dividends. 3a b Ordinary dividends. Attach Sch. B if required Standard Deduction for 4a IRA distributions. 4a b Taxable amount Single Marie Sing separately. C Pensions and annuities 4c d Taxable amount $12.200 Sa Social security benefits Sa b Taxable amount Married fling intly or Qualitying Capital gain or loss. Attach Schedule D it required. If not required, check here widow 7a Other income from Schedule 1, line 9 $24.400 - Head of b Add lines 1, 2, 3, 4b, dd, Sb, 6 and 7a. This is your total income household 8a Adjustments to income from Schedule 1, line 22 $18.350 f you checked b Subtract line 8a from line 7b. This is your adjusted gross income any box under 9 9 Standard Standard deduction or itemized deductions from Schedule A) Deduction 10 Qualified business income deduction. Attach Form 8995 or Form 8996-A 10 se instructions 11a Add lines 9 and 10 - b Taxable income. Subtract line 11a from line 8 For Disclosure, Privacy Act, and Paperwork Reduction Act Notice, see separate instructions Cat. No. 113206 7b 8a Bb 11a 11b Form 1040 0019 Form 1040 (2019) Lance H. and Wanda B. Dean 123-45-6786 Page 2 12a 12a Tax (see inst.) Check if any from Form(s): 1 8814 2 - 4972 3 b Add Schedule 2, line 3, and line 122 and enter the total .. 12b 13a 13a 13b Child tax credit or credit for other dependents b Add Schedule 3, line 7, and line 13a and enter the total .. Subtract line 13b from line 12b. If zero or less, enter -o- . 15 Other taxes, including self-employment tax, from Schedule 2, line 10 14 14 15 16 Add lines 14 and 15. This is your total tax 16 17 Federal income tax withheld from Forms W-2 and 1099 17 18 If you have a qualifying child, attach Sch. EIC. Other payments and refundable credits: a Earned income credit (EIC). 18a 18b qualifying child, attach Sch. EIC. If you have nontaxable combat pay, see instructions. 18c 18d 18e 19 19 a Earned income credit (EIC). 18a b Additional child tax credit. Attach Schedule 8812 c American opportunity credit from Form 8863, line 8 d Schedule 3, line 14..... e Add lines 18a through 18d. These are your total other payments and refundable credits ....... Add lines 17 and 18e. These are your total payments If line 19 is more than line 15, subtract line 15 from line 19. This is the amount you overpaid Amount of line 20 you want refunded to you. If Form 8888 is attached, check here Routing number -c Type: - Checking - Savings Account number 1 Amount of line 20 you want applied to your 2020 estimated 20 Refund 20 21a 21a Direct deposit? See instructions. d 22 tax ...... 22 23 Amount Amount you owe. Subtract line 19 from line 16. For details on how to pay, see instructions.. 23 OMB No. 1545-0074 SCHEDULE 1 (Form 1040 or 1040-SR) Additional Income and Adjustments to Income Department of the Treasury Attach to Form 1040 or 1040-SR. Internal Revenue Service Go to www.irs.gov/Form1040 for instructions and the latest information. Name(s) shown on Form 1040 or 1040-SR 2019 Attachment Sequence No. 01 Your social security number AS a 9 At any time during 2019, did you receive, sell, send, exchange, or otherwise acquire any financial interest in any virtual currency? Yes No Partl Additional Income 1 Taxable refunds, credits, or offsets of state and local income taxes 2a Alimony received 2a b Date of original divorce or separation agreement (see instructions) 3 Business income or (loss). Attach Schedule C 3 4 Other gains or losses). Attach Form 4797 4 5 Rental real estate, royalties, partnerships, S corporations, trusts, etc. Attach Schedule E 5 6 Farm income or (loss). Attach Schedule F 6 Unemployment compensation 7 8 Other income. List type and amount 8 Combine lines 1 through 8. Enter here and on Form 1040 or 1040-SR, line 7a Part II Adjustments to Income 10 Educator expenses 10 11 Certain business expenses of reservists, performing artists, and fee-basis government officials. Attach Form 2106 11 12 Health savings account deduction. Attach Form 8889 12 13 Moving expenses for members of the Armed Forces. Attach Form 3903 13 14 Deductible part of self-employment tax. Attach Schedule SE 14 15 Self-employed SEP, SIMPLE, and qualified plans 15 16 Self-employed health insurance deduction 16 17 Penalty on early withdrawal of savings 17 18a Alimony paid 18a b Recipient's SSN c Date of original divorce or separation agreement (see instructions) 19 IRA deduction 19 20 Student loan interest deduction 20 21 Reserved for future use 21 22 Add lines 10 through 21. These are your adjustments to income. Enter here and on Form 1040 or 1040-SR, line 8a 22 For Paperwork Reduction Act Notice, see your tax return instructions. Cat. No. 71479F Schedule 1 (Form 1040 or 1040-SR) 2019