Please complete the federal income tax return for Jack and Jill for the tax year 2017. Please complete Form 1040 in its entirety (down to the amount owed or the amount to be refunded) and Schedule A. Please show all calculations on a separate piece of paper and document the calculation of the tax liability in the space immediately below these instructions (in the space, where indicated); you must use this box to show your calculation of the tax liability or you will not earn credit on this portion of the assignment.

Please order the pages of your submission in the following order:

1.This page

2.The Fact Pattern page

3.Form 1040 page 1

4.Form 1040 page 2

5.Schedule A

6.Pages with supporting calculations with reference to the related item being calculated. Calculations without reference will not receive partial credit.

All documents should be stapled together in the upper left corner. Failure to staple the documents together will result in the loss of 10% of the possible points on this assignment. Failure to submit the pages in the order requested will result in the loss of 10% of the possible points on this assignment. Typed tax returns will not be accepted.

Jack and Jill have been married for many years and plan to file a joint return for tax year 2017; as of the end of the tax year, Jack was 51 years old and Jill was 45 years old. They were both employees during 2017. The following information is available relative to their salaries, benefits and withholdings:

Jack

Jill

Salary

$70,000

$65,000

Health insurance premiums paid by Jack's employer for Jack's family (high deductible plan; deductible is $6,300/year)

$6,000

-

Contributions made by Jack's employer to a Health Savings Account for the benefit of Jack's family

$6,900

-

Disability Insurance premiums paid by Jack's employer

$4,000

-

Disability Insurance premiums paid by Jill

-

$2,000

State income tax withheld

$4,000

$3,250

Local income tax withheld

$1,500

$1,100

Federal income tax withheld

$17,500

$6,200

Contributions to IRA by Jack and Jill

$7,000

$5,500

They provide more than half of the support of their daughter, Pamela (age 25), who does not live with them and is a full-time medical student. Pamela received a $25,000 scholarship in 2016, which covered her tuition, books and supplies of $10,000 for the fall 2016 and $10,300 for the spring 2017, at which time she graduated.They furnish all of the support of Belinda (Jack's grandmother, a German citizen), who is age 95 and lives in a nursing home in London. They also support Peggy (age 66), who is a friend of the family and lives with them but is a citizen of Australia.

Jack and Jill earned interest income on a savings account in the amount of $3,300 and received dividends from stock investments of $7,000 ($5,900 of which are qualified).

Jack and Jill were disabled for a short period during 2017 due to a car accident. During this period, Jack received $6,000 under his disability plan, and Jill received $3,500 under her disability plan.

The car that was damaged in the accident had a fair market value before the accident of $22,000 and after the accident of $0. Jack and Jill had paid $30,000 for the car a few years ago. The insurance company paid $6,500 on the claim during 2017.

Jack and Jill received a refund of state income taxes for the tax year 2016, during 2017 for $1,200. Jack and Jill itemized their deductions in 2016 in the amount of $12,900.

Property taxes on their home for 2017 were $10,000. They also paid the property taxes on Pamela's home for $4,000.

The couple incurred unreimbursed medical expenses as follows:

Cosmetic surgery for Jill $1,250

Nonprescription medication $500

Prescription medication for Jack $750

Pamela's health insurance premiums $4,000

Assisted care facility for Jack while he recovered from the car accident of $10,000; Jill stayed with him in the assisted care facility even though there was no medical reason for her to be there, for $6,000.

The couple installed an elevator to help Jack go upstairs in their home after the accident for $7,000. The appraisal costing $300 indicated that the home's value increased by $1,400 as a result of the elevator