Please answer this question using 2019 Tax Form 1040, a schedule A (along with an 8283 pertaining to the gift to charity), and a schedule 1.
INDIVIDUAL TAX RETURN PROBLEM 1 Required: . Use the following information to complete Keith and Jennifer Hamilton's 2018 federal income tax return. If any information is missing, use reasonable assumptions to fill in the gaps. . Form 1040, supporting schedules, and instructions to the forms and schedules can be found at the IRS website ( www.irs.gov). Facts: 1. Keith Hamilton is employed as an airline pilot for Flyby Airlines in Las Vegas, Nevada. Jennifer is employed as a teacher's assistant at Small World Elementary School, in Henderson, Nevada. Keith and Jennifer live in a home they purchased this year. Keith and Jennifer have three children who lived with them all year, Joshua (17), Danielle (14), and Sara (10). Keith and Jennifer provided the following personal information: Keith and Jennifer do not want to contribute to the presidential election campaign. Keith and Jennifer do not claim itemized deductions. . Keith and Jennifer live at 3678 Blue Sky Drive, Henderson, Nevada 89052. . Keith's birthday is 10/12/1973 and his Social Security number is 535-22-4466. Jennifer's birthday is 7/16/1976 and her Social Security number is 535-44-2255. Joshua's birthday is 6/30/2001 and his Social Security number is 454-54-5454. Danielle's birthday is 8/12/2004 and her Social Security number is 343-43-4343. Sara's birthday is 5/13/2008 and her Social Security number is 232-32-3232. Page C-2 2. Keith received the following Form W-2 for 2018 from Flyby Airlines. Void 22222 a Employee's social security number 535-22-4466 b Employer identification number (EIN) 91-0001002 For Official Use Only OMB No. 1545-0008 1 Wages, tips, other compensation 163,645.00 3 Social security wages 128,400.00 5 Medicare wages and tips 178,645.00 7 Social security tips c Employer's name, address, and ZIP code Flyby Airlines 375 West Flight Blvd. Las Vegas, NV 89119 2 Federal income tax withheld 25,000.00 4 Social security tax withheld 7,960.80 6 Medicare tax withheld 2,590.35 8 Allocated tips d Control number 9 Verification code 10 Dependent care benefits Last name Suff. 11 Nonqualified plans e Employee's first name and initial Keith Hamilton 12a See instructions for box 12 D 15,000.00 13 Statutory employee Retirement Retirement plan Third-party sick pay 12b 200 3678 Blue Sky Drive Henderson, NV 89052 14 Other 12c OOD. 12d f Employee's address and ZIP code 15 State Employer's state ID number | NV 987654321 18 Local wages, tips, etc. 19 Local income tax 20 Locality name 16 State wages, tips, etc. 163,645. 00 17 State income tax 0 .00 W-2 Wage and Tax Statement 2018 Wage and Tax Statement Form Copy A For Social Security Administration Send this entire page with Form W-3 to the Social Security Administration; photocopies are not acceptable. Department of the Treasury-Internal Revenue Service For Privacy Act and Paperwork Reduction Act Notice, see the separate instructions. Cat. No. 10134D 3. Jennifer received the following Form W-2 for 2018 from Small World Elementary School. For Official Use Only OMB No. 1545-0008 22222 Void a Employee's social security number 535-44-2255 b Employer identification number (EIN) 91-0001003 c Employer's name, address, and ZIP code Small World Elementary School 333 Tiny Tot Lane Henderson, NV 89053 1 Wages, tips, other compensation 36,825.00 3 Social security wages 39,925.00 2 Federal income tax withheld 3,350.00 4 Social security tax withheld 2,475.35 6 Medicare tax withheld 578.91 8 Allocated tips 5 Medicare wages and tips 39,925.00 7 Social security tips d Control number 9 Verification code 10 Dependent care benefits Last name Suff. 11 Nonqualified plans e Employee's first name and initial Jennifer Hamilton 12a See instructions for box 12 3,100 JIUU 13 Statutory employee Retirement plan Third-party sick pay 12b 3678 Blue Sky Drive Henderson, NV 89052 14 Other f Employee's address and ZIP code 15 State Employer's state ID number 18 Local wages, tips, etc. 19 Local income tax 20 Locality name NV | 123456789 16 State wages, tips, etc. 36,825.00 17 State income tax 0.00 Wage and Tax Statement Form Copy A For Social Security Administration Send this entire page with Form W-3 to the Social Security Administration; photocopies are not acceptable. 2018 Department of the Treasury-Internal Revenue Service For Privacy Act and Paperwork Reduction Act Notice, see the separate instructions. Cat. No. 10134D 4. During 2018, Keith and Jennifer received $550 in interest from Las Vegas municipal bonds, $1,070 interest from U.S. Treasury bonds, and $65 from their savings account at SCD Credit Union. Keith and Jennifer are joint owners of the Las Vegas city bonds and the U.S. Treasury bonds. They have a joint savings account at SCD Credit Union. Page C-3 5. On January 21, 2018, Jennifer was involved in a car accident. Because the other driver was at fault, the other driver's insurance company paid Jennifer $1,350 for medical expenses relating to her injuries from the accident and $300 for emotional distress from the accident. She received payment on March 15, 2018. 6. Keith's father died on November 15, 2017. Keith received a $100,000 death benefit from his father's life insurance policy on February 8, 2018. 7. On February 15, 2018, Keith hurt his arm on a family skiing trip in Utah and was unable to fly for two weeks. He received $4,000 for disability pay from his disability insurance policy. He received the check on March 2, 2018. Flyby Airlines paid $600 in premiums on this policy during 2018. The disability insurance policy premiums are paid for by Flyby Airlines as a fully taxable fringe benefit to Keith (the premiums paid on his behalf are included in Keith's compensation amount on his W-2). 8. Jennifer's grandmother died on March 10, 2018, leaving Jennifer with an inheritance of $30,000. (She received the inheritance on May 12, 2018.) Flyby Airlines had space available on its Long Island, New York, flight and provided Keith, Jennifer, and their three children with free flights so they could attend the funeral. The value of the ticket for each passenger was $600. 9. On April 1, 2018, Jennifer slipped in the Small World Elementary lunchroom and injured her back. Jennifer received $1,200 in worker's compensation benefits because her work-related injury caused her to miss two weeks of work. She also received a $2,645 reimbursement for medical expenses from the health insurance company. Small World Elementary pays the premiums for Jennifer's health insurance policy as a nontaxable fringe benefit. 10. On May 17, 2018, Keith and Jennifer received a federal income tax refund of $975 from their 2017 federal income tax return. 11. On June 5, 2018, Keith and Jennifer sold their home in Henderson, Nevada, for $510,000 (net of commissions). Keith and Jennifer purchased the home 11 years ago for $470,000. On July 12, 2018, they bought a new home for $675,000. 12. On July 25, 2018, Keiths aunt Beatrice gave Keith $18,000 because she wanted to let everyone know that Keith is her favorite nephew. 13. On September 29, 2018, Jennifer won an iPad valued at $500 in a raffle at the annual fair held at Joshua's high school. 14. Keith and Jennifer have qualifying insurance for purposes of the the Affordable Care Act (ACA). INDIVIDUAL TAX RETURN PROBLEM 1 Required: . Use the following information to complete Keith and Jennifer Hamilton's 2018 federal income tax return. If any information is missing, use reasonable assumptions to fill in the gaps. . Form 1040, supporting schedules, and instructions to the forms and schedules can be found at the IRS website ( www.irs.gov). Facts: 1. Keith Hamilton is employed as an airline pilot for Flyby Airlines in Las Vegas, Nevada. Jennifer is employed as a teacher's assistant at Small World Elementary School, in Henderson, Nevada. Keith and Jennifer live in a home they purchased this year. Keith and Jennifer have three children who lived with them all year, Joshua (17), Danielle (14), and Sara (10). Keith and Jennifer provided the following personal information: Keith and Jennifer do not want to contribute to the presidential election campaign. Keith and Jennifer do not claim itemized deductions. . Keith and Jennifer live at 3678 Blue Sky Drive, Henderson, Nevada 89052. . Keith's birthday is 10/12/1973 and his Social Security number is 535-22-4466. Jennifer's birthday is 7/16/1976 and her Social Security number is 535-44-2255. Joshua's birthday is 6/30/2001 and his Social Security number is 454-54-5454. Danielle's birthday is 8/12/2004 and her Social Security number is 343-43-4343. Sara's birthday is 5/13/2008 and her Social Security number is 232-32-3232. Page C-2 2. Keith received the following Form W-2 for 2018 from Flyby Airlines. Void 22222 a Employee's social security number 535-22-4466 b Employer identification number (EIN) 91-0001002 For Official Use Only OMB No. 1545-0008 1 Wages, tips, other compensation 163,645.00 3 Social security wages 128,400.00 5 Medicare wages and tips 178,645.00 7 Social security tips c Employer's name, address, and ZIP code Flyby Airlines 375 West Flight Blvd. Las Vegas, NV 89119 2 Federal income tax withheld 25,000.00 4 Social security tax withheld 7,960.80 6 Medicare tax withheld 2,590.35 8 Allocated tips d Control number 9 Verification code 10 Dependent care benefits Last name Suff. 11 Nonqualified plans e Employee's first name and initial Keith Hamilton 12a See instructions for box 12 D 15,000.00 13 Statutory employee Retirement Retirement plan Third-party sick pay 12b 200 3678 Blue Sky Drive Henderson, NV 89052 14 Other 12c OOD. 12d f Employee's address and ZIP code 15 State Employer's state ID number | NV 987654321 18 Local wages, tips, etc. 19 Local income tax 20 Locality name 16 State wages, tips, etc. 163,645. 00 17 State income tax 0 .00 W-2 Wage and Tax Statement 2018 Wage and Tax Statement Form Copy A For Social Security Administration Send this entire page with Form W-3 to the Social Security Administration; photocopies are not acceptable. Department of the Treasury-Internal Revenue Service For Privacy Act and Paperwork Reduction Act Notice, see the separate instructions. Cat. No. 10134D 3. Jennifer received the following Form W-2 for 2018 from Small World Elementary School. For Official Use Only OMB No. 1545-0008 22222 Void a Employee's social security number 535-44-2255 b Employer identification number (EIN) 91-0001003 c Employer's name, address, and ZIP code Small World Elementary School 333 Tiny Tot Lane Henderson, NV 89053 1 Wages, tips, other compensation 36,825.00 3 Social security wages 39,925.00 2 Federal income tax withheld 3,350.00 4 Social security tax withheld 2,475.35 6 Medicare tax withheld 578.91 8 Allocated tips 5 Medicare wages and tips 39,925.00 7 Social security tips d Control number 9 Verification code 10 Dependent care benefits Last name Suff. 11 Nonqualified plans e Employee's first name and initial Jennifer Hamilton 12a See instructions for box 12 3,100 JIUU 13 Statutory employee Retirement plan Third-party sick pay 12b 3678 Blue Sky Drive Henderson, NV 89052 14 Other f Employee's address and ZIP code 15 State Employer's state ID number 18 Local wages, tips, etc. 19 Local income tax 20 Locality name NV | 123456789 16 State wages, tips, etc. 36,825.00 17 State income tax 0.00 Wage and Tax Statement Form Copy A For Social Security Administration Send this entire page with Form W-3 to the Social Security Administration; photocopies are not acceptable. 2018 Department of the Treasury-Internal Revenue Service For Privacy Act and Paperwork Reduction Act Notice, see the separate instructions. Cat. No. 10134D 4. During 2018, Keith and Jennifer received $550 in interest from Las Vegas municipal bonds, $1,070 interest from U.S. Treasury bonds, and $65 from their savings account at SCD Credit Union. Keith and Jennifer are joint owners of the Las Vegas city bonds and the U.S. Treasury bonds. They have a joint savings account at SCD Credit Union. Page C-3 5. On January 21, 2018, Jennifer was involved in a car accident. Because the other driver was at fault, the other driver's insurance company paid Jennifer $1,350 for medical expenses relating to her injuries from the accident and $300 for emotional distress from the accident. She received payment on March 15, 2018. 6. Keith's father died on November 15, 2017. Keith received a $100,000 death benefit from his father's life insurance policy on February 8, 2018. 7. On February 15, 2018, Keith hurt his arm on a family skiing trip in Utah and was unable to fly for two weeks. He received $4,000 for disability pay from his disability insurance policy. He received the check on March 2, 2018. Flyby Airlines paid $600 in premiums on this policy during 2018. The disability insurance policy premiums are paid for by Flyby Airlines as a fully taxable fringe benefit to Keith (the premiums paid on his behalf are included in Keith's compensation amount on his W-2). 8. Jennifer's grandmother died on March 10, 2018, leaving Jennifer with an inheritance of $30,000. (She received the inheritance on May 12, 2018.) Flyby Airlines had space available on its Long Island, New York, flight and provided Keith, Jennifer, and their three children with free flights so they could attend the funeral. The value of the ticket for each passenger was $600. 9. On April 1, 2018, Jennifer slipped in the Small World Elementary lunchroom and injured her back. Jennifer received $1,200 in worker's compensation benefits because her work-related injury caused her to miss two weeks of work. She also received a $2,645 reimbursement for medical expenses from the health insurance company. Small World Elementary pays the premiums for Jennifer's health insurance policy as a nontaxable fringe benefit. 10. On May 17, 2018, Keith and Jennifer received a federal income tax refund of $975 from their 2017 federal income tax return. 11. On June 5, 2018, Keith and Jennifer sold their home in Henderson, Nevada, for $510,000 (net of commissions). Keith and Jennifer purchased the home 11 years ago for $470,000. On July 12, 2018, they bought a new home for $675,000. 12. On July 25, 2018, Keiths aunt Beatrice gave Keith $18,000 because she wanted to let everyone know that Keith is her favorite nephew. 13. On September 29, 2018, Jennifer won an iPad valued at $500 in a raffle at the annual fair held at Joshua's high school. 14. Keith and Jennifer have qualifying insurance for purposes of the the Affordable Care Act (ACA)
