Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Paula Oates, age 37, is an unmarried custodial parent. Her household includes three dependent children: Harry (age 15), Holly (age 13), and Holland (age 3).

Paula Oates, age 37, is an unmarried custodial parent. Her household includes three dependent children: Harry (age 15), Holly (age 13), and Holland (age 3). Oates divorced her husband 2 years ago and receives monthly alimony payments of $5,000, with $3,500 of this amount designated as child support.

Oates works for a CPA firm. For 2019, Oates, who has adjusted gross income of $40,000 (as reported on Form 1040, line 8b), qualifies to itemize deductions and is subject to federal income tax liability. She has timely filed federal and state income tax returns every year and has never been previously audited by the Internal Revenue Service (IRS).

In 2019, Oates:

  • Paid $1,000 in medical insurance premiums.
  • Paid $400 in state income taxes when she filed the prior year's tax return in the current year.
  • Paid $2,500 in real estate taxes on her vacation home.
  • Paid $4,000 in home mortgage interest (Form 1098).
  • Paid investment interest of $1,000, which does not exceed net investment income.
  • Had $30,000 of cash charitable contribution carryover from last year (2018).
  • Paid $900 toward continuing education courses and was not reimbursed by her employer.

Determine the amounts Oates should enter on Form 1040 Schedule A. For each item, enter the appropriate amount in the associated cell. If no amount is required, enter a zero (0). Round all amounts to the nearest dollar.

2019 Form 1040 Schedule A item (description)

Amount

1. Medical and dental expenses (Line 1)
2. Enter amount from Form 1040, line 8b (Line 2)
3. Multiply line 2 by 10% (0.10) (Line 3)
4. Subtract line 3 from line 1. If line 3 is more than line 1, enter 0. (Line 4)
5. State and local income taxes (Line 5a)
6. Other taxes - real estate (Line 6)
7. Home mortgage interest and points reported on Form 1098 (Line 8a)
8. Investment interest (Line 9)
9. Gifts to charity - carryover from prior year (Line 13)
10. Total itemized deductions (Line 17)

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Business Accounting Volume 2

Authors: Frank Wood, Alan Sangster

6th Edition

0273039148, 9780273039143

More Books

Students also viewed these Accounting questions