please help!

TAX RETURN PROBLEM #1 (Adapted from Connect-Chapter 5 #77) Diana (age 38) and Ryan Workman (age 40) were married on January 1, 2021. Diana has an eight-year-old son, Jorge Anderson, from her previous marriage. Diana will claim Jorge as a dependent during the current year. Ryan works as a computer programmer at Datafile Inc. (DI). Diana is self-employed and runs a day care center that has been in business for the past 10 years. The Workmans personal information needed to complete the Form 1040 is below: Social Security Numbers: Ryan 110-44-5555 Diana 111-22-3333 Jorge 112-23-3456 Address: 1234 Numbers Lane Atlantic City, NJ 11225 The Workmans do not want to direct any money to the Presidential Election Campaign nor did they engage in any cryptocurrency transactions during the year. Neither Djana nor Ryan were born before 1957 and neither of them is legally blind. Day Care Center Information: Name: Tiny Tots Address: 2020 Kiddic Way, Atlantic City, NJ 11227 Employer ID number: 61-9988776 Business code: 624410 Accounting method: Cash Diana is not required to file any Form 1099s due to the childcare business. She did materially participate in the business. In addition to the tax information on their W-2 (see "y" for more information on Ryan's W-2) and 1099 provided in class, the Workmans disclose the following information in their interview with you: Diana received $2,000 in alimony and $4,500 in child support payments from ber former husband They divorced on 5/30/2016. b. Diana won a $900 cash prize at her church-sponsored Bingo game. The couple bought 50 shares of ABC Inc. stock for $40 per share on July 2. The stock was worth $47 a share on December 31. c. d. d e. f. a 8 h. i. Diana's father passed away on April 14. She inherited cash of $50,000 from her father and his baseball card collection, valued at $2,000. As beneficiary of her father's life insurance policy, Diana also received $150,000 The couple spent a weekend in Atlantic City in November and came home with gross gambling winnings of S1,200 Ryan was hit and injured by a drunk driver while crossing a street at a crosswalk. He was unable to work for a month. He received $6,000 from his disability insurance. Ryan had paid for the insurance policy. The drunk driver who hit Ryan in part (h) was required to pay his $2,000 medical costs, $1,500 for the emotional trauma he suffered from the accident, and $5,000 for punitive damages Diana is a 10 percent owner of MNO Inc., a Subchapter Scorporation. The company reported ordinary business income for the year of 892,000. Diana acquired the MNO stock two years ago. (Diana has not received her Schedule K-1 yet, but she knows this information to be accurate.) Diana's daycare business collected $35,000 in revenues. In addition, customers owed her $3,000 at year-end. During the year, Diana spent $5,500 for supplies, $1,500 for utilities, $15,000 for rent, and $500 for miscellaneous expenses. One customer gave her use of his vacation home for a week (worth $2,500) in exchange for Diana allowing his child to attend the day care center free of charge. Diana accounts for her business activities using the cash method of accounting Ryan received a W-2 from his employer. However, the W-2 he received listed ONLY his salary (and those disability premiums) in Box 1. He has already heard that Di will be issuing "corrected" W-2s shortly. Apparently, DI's accountant did not understand what types of fringe benefits or other perks may have been taxable. ADD any of the following items that are TAXABLE to the amount in Box 1 of Ryan's W-2 to get the dollar amount that goes on line 1 of the Form 1040. If the amount(s) are NOT taxable or are not taxable in the current year, do not add them to Box 1. Ryan's employer pays the couple's annual health insurance premiums of $5,500 for a qualified plan. Ryan borrowed $12,000 from DI to purchase a car. DI charged him 2 percent interest (5240) on the loan, which Ryan paid on December 31. DI would have charged Ryan $720 if interest was calculated at the applicable federal interest rate. Ryan received $400 cash for reaching 10 years of continuous service at DI. For meeting his performance goals this year, Ryan was informed on December 27 that he would receive a $5,000 year-end bonus, DI (located in Houston, Texas) mailed Ryan's bonus check from its payroll processing center (Tampa, Florida) on December 28. Ryan didn't receive the check at his home until January 2. DI did not include this amount in the 2021 salary on his W-2. j . Information needed: 1099s (3) Form W-2 Instruction sheet Tax forms (Form 1040, Schedule 1, and Schedule C) . . Required: Prepare a Schedule C, Schedule 1, and Form 1040 (through Line 9-Total Income). The forms should be filled out in pen or pencil (I suggest using something you can erase). Do not type amounts in to the "fill-in" forms provided on the irs.gov site. A paper copy of the tax return is required to be submitted either in class or to my office. TAX RETURN PROBLEM #1 (Adapted from Connect-Chapter 5 #77) Diana (age 38) and Ryan Workman (age 40) were married on January 1, 2021. Diana has an eight-year-old son, Jorge Anderson, from her previous marriage. Diana will claim Jorge as a dependent during the current year. Ryan works as a computer programmer at Datafile Inc. (DI). Diana is self-employed and runs a day care center that has been in business for the past 10 years. The Workmans personal information needed to complete the Form 1040 is below: Social Security Numbers: Ryan 110-44-5555 Diana 111-22-3333 Jorge 112-23-3456 Address: 1234 Numbers Lane Atlantic City, NJ 11225 The Workmans do not want to direct any money to the Presidential Election Campaign nor did they engage in any cryptocurrency transactions during the year. Neither Djana nor Ryan were born before 1957 and neither of them is legally blind. Day Care Center Information: Name: Tiny Tots Address: 2020 Kiddic Way, Atlantic City, NJ 11227 Employer ID number: 61-9988776 Business code: 624410 Accounting method: Cash Diana is not required to file any Form 1099s due to the childcare business. She did materially participate in the business. In addition to the tax information on their W-2 (see "y" for more information on Ryan's W-2) and 1099 provided in class, the Workmans disclose the following information in their interview with you: Diana received $2,000 in alimony and $4,500 in child support payments from ber former husband They divorced on 5/30/2016. b. Diana won a $900 cash prize at her church-sponsored Bingo game. The couple bought 50 shares of ABC Inc. stock for $40 per share on July 2. The stock was worth $47 a share on December 31. c. d. d e. f. a 8 h. i. Diana's father passed away on April 14. She inherited cash of $50,000 from her father and his baseball card collection, valued at $2,000. As beneficiary of her father's life insurance policy, Diana also received $150,000 The couple spent a weekend in Atlantic City in November and came home with gross gambling winnings of S1,200 Ryan was hit and injured by a drunk driver while crossing a street at a crosswalk. He was unable to work for a month. He received $6,000 from his disability insurance. Ryan had paid for the insurance policy. The drunk driver who hit Ryan in part (h) was required to pay his $2,000 medical costs, $1,500 for the emotional trauma he suffered from the accident, and $5,000 for punitive damages Diana is a 10 percent owner of MNO Inc., a Subchapter Scorporation. The company reported ordinary business income for the year of 892,000. Diana acquired the MNO stock two years ago. (Diana has not received her Schedule K-1 yet, but she knows this information to be accurate.) Diana's daycare business collected $35,000 in revenues. In addition, customers owed her $3,000 at year-end. During the year, Diana spent $5,500 for supplies, $1,500 for utilities, $15,000 for rent, and $500 for miscellaneous expenses. One customer gave her use of his vacation home for a week (worth $2,500) in exchange for Diana allowing his child to attend the day care center free of charge. Diana accounts for her business activities using the cash method of accounting Ryan received a W-2 from his employer. However, the W-2 he received listed ONLY his salary (and those disability premiums) in Box 1. He has already heard that Di will be issuing "corrected" W-2s shortly. Apparently, DI's accountant did not understand what types of fringe benefits or other perks may have been taxable. ADD any of the following items that are TAXABLE to the amount in Box 1 of Ryan's W-2 to get the dollar amount that goes on line 1 of the Form 1040. If the amount(s) are NOT taxable or are not taxable in the current year, do not add them to Box 1. Ryan's employer pays the couple's annual health insurance premiums of $5,500 for a qualified plan. Ryan borrowed $12,000 from DI to purchase a car. DI charged him 2 percent interest (5240) on the loan, which Ryan paid on December 31. DI would have charged Ryan $720 if interest was calculated at the applicable federal interest rate. Ryan received $400 cash for reaching 10 years of continuous service at DI. For meeting his performance goals this year, Ryan was informed on December 27 that he would receive a $5,000 year-end bonus, DI (located in Houston, Texas) mailed Ryan's bonus check from its payroll processing center (Tampa, Florida) on December 28. Ryan didn't receive the check at his home until January 2. DI did not include this amount in the 2021 salary on his W-2. j . Information needed: 1099s (3) Form W-2 Instruction sheet Tax forms (Form 1040, Schedule 1, and Schedule C) . . Required: Prepare a Schedule C, Schedule 1, and Form 1040 (through Line 9-Total Income). The forms should be filled out in pen or pencil (I suggest using something you can erase). Do not type amounts in to the "fill-in" forms provided on the irs.gov site. A paper copy of the tax return is required to be submitted either in class or to my office