Please complete the 2021 federal individual income tax return (Form 1040, Schedule 1 and Schedule A) for Bob and Melissa Grant. Stop after completing 1040 Line 16 (first line item on the second page of Form 1040).

The Grant are married and live in Lexington, Kentucky. The Grants would like to file a joint tax return for the year. They have 19-year-old twin daughters who still qualify as their dependents on the tax return. For this project, we assume that they do not claim any tax credits.

Bob Grant received the following during the year:

Employer	Gross Wages	Federal Income Tax Withholding	State Income Tax Withholding
University of Kentucky	$117,450	$22,000	$6,000

Melissa Grant received the following during the year:

Employer	Gross Wages	Federal Income Tax Withholding	State Income Tax Withholding
Jensen Photography	$20,500	$2,450	$1,025

All applicable and appropriate payroll taxes were withheld by the Grants' respective employers.

The Grants also received the following during the year:

Interest Income from First Kentucky Bank $580

Interest Income from City of Lexington, KY Bond $600

Interest Income from U.S. Treasury Bond $825

Disability insurance payments received by Bob on account of injury of 3,000

Bob's employer paid for the insurance policy issued by Aflac (NYSE AFL) as part of the tax-free fringe benefits

Payment to Melissa as a result of a lawsuit for damages she sustained in a car accident:

Reimbursement for her medical Expenses $14,500

Punitive Damages $10,000

Eight years ago, Melissa purchased an annuity contract for $80,000. This year, she received her first payment on the annuity. The payment amount was $16,000. The annuity started to pay on January 1 and she received a full first year's payment. It will pay her $16,000 per year for ten years beginning this year.

In 2021, they also received $420 of Kentucky state income tax refund. They took itemized deduction in 2020 and the amount of their total itemized deduction in 2020 is $31,878. The total of their 2020 State and Local Taxes paid is $9,100.

The Grants also placed $455 in the Kentucky Derby and won $3,225 from their tickets.

The Grants paid or incurred the following expenses during the year:

Dental/Orthdontist (not paid by insurance) $ 23,000

Medical visits (not paid by insurance) 625

Prescriptions (not paid by insurance) 380

Real property taxes on residence 1,800

Mortgage interest on principal residence 8,560

Contribution to First Baptist Church of Kentucky (Qualified Charity) 7,000

Fee paid to Jones & Company, CPAs for tax preparation 200

In addition, Melissa paid $2,500 of interest on her student loan.

During the year, the Grants' personal belongings were damaged by a federally declared disaster in September of the current year. All the items are considered damaged in one event.

Item	Purchase Date	Decline in FMV	Tax Basis of Item	Insurance Reimbursement Received
Laptop computer and Printer	09/01/2013	3,000	3,000	500
Rifle	03/01/2010	12,000	12,500	500
TV/Projector	03/01/2019	5,000	13,000	1,000
2010 Honda Pilot	07/01/2016	4,000	6,500	500

The Grants do not want to contribute to the Presidential Election Campaign and do not have any virtual currency.

Form 1040 Line 1 ___ (W-2 Wages, enter without comma or $)

Tax-exempt interest on Line 2a ____

Taxable interest on Line 2b ___

Pensions and annuities (gross amount, Line 5a) _____

Pensions and annuities (Taxable amount, Line 5b) ______

Schedule 1 Line 1 (Taxable refunds) _____

How much of the AFLAC income is taxable as part of "Other income" on Schedule 1 (Line 8z)?

Schedule-1 (Line 9) Total other income __________

Adjusted Gross Income before Student Loan Interest Deduction (Form 1040, Line #9) _____

The phase-out percentage for the student loan interest deduction is

Question 12 options:

	20%
	40%
	60%
	80%
	100%

Schedule 1 Line 21 Student loan interest deduction ____. This number also applies to Form 1040, Line 10.

2021 Form 1040 Line 11 (Adjusted Gross Income)

Question 14 options:

Schedule-A Itemized Deductions Line 4 (Medical and Dental Expenses)

Round-up to the next dollar

Question 15 options:

Schedule A Line 7 (Taxes You Paid)

Question 16 options:

Schedule A Line 10 (Interest You Paid)

Question 17 options:

Schedule A Line 14 (Gifts to Charity)

Question 18 options:

Schedule A, Line 15 Casualty and Theft Losses (All items are considered one event) ______

Question 19 options:

Schedule-A Line 16 (Other Itemized Deductions)

Question 20 options:

2021 Form 1040 Line 12a (total Standard deduction or itemized deductions)

2021 Form 1040 Line 15 (Taxable income)

2021 Form 1040 Line 16 (Income tax liability)

Round-up to the next dollar (do not put in $ sign)