Answered step by step
Verified Expert Solution
Question
1 Approved Answer
please make sure to use 2020 forms. Need form 1040 and schedues A, B, C, D and SE Kelly and Chanelle Chambers, ages 47 and
please make sure to use 2020 forms. Need form 1040 and schedues A, B, C, D and SE
Kelly and Chanelle Chambers, ages 47 and 45, are married and live at 584 Thoreau Drive, Boston, MA 59483. Kelly's Social Security number is 111-11-1111 and Chanelle's is 222- 22-2222. The Chambers have two children: Emma, age 23, and Chet, age 19. Their Social Security numbers are 333-33-3333 and 444-44-4444, respectively. Emma is a single college student and earned $8,000 during the summer. Kelly and Chanelle help Emma through school by paying for her room, board, and tuition. Emma lives at home during the summer. Chet has a physical handicap and lives at home. He attends a local university and earned $4,000 working for a marketing firm. In sum, Kelly and Chanelle provide more than 50% of both Emma's and Chet's total support for the year. Kelly is a commercial pilot for a small airline. His salary is $95,000, from which $19,000 of federal income tax and $8,000 of state income tax were withheld. Kelly also pays premiums for health, disability, and life insurance. $2,000 of the premium was for health insurance, $250 for disability, and $400 for life insurance. Chanelle owns Alliance Networks, a proprietorship that does network consulting. During the year, Chanelle's gross revenues were $23,000. She incurred the following ex- penses in her business: Liability insurance $ 700 Software rental 5,400 Journals and magazines 150 Training seminars 1,200 Supplies 1,300 800 Donations to a political campaign fund MH Kelly enjoys playing guitar and plays in a band. Kelly's band has developed a local following. This year, his gross revenues were $1,200 for playing shows and $700 on CD sales. He incurred the following expenses: Studio rent expense $1,300 Sound system repairs 200 CD production 500 New guitar and amplifier 800 Kelly's father passed away during the year. Kelly and Chanelle received $100,000 from the life insurance policy. Neither Kelly nor Chanelle paid any of the premiums, Chanelle purchased 100 shares of Thurston Co. stock on May 1, 1992, for $1,000. Thurston Co. was declared bankrupt during the current year. Chet's physician recommended that he see a physical therapist to help with his dis- ability. Kelly paid the therapist $7,000 during the year because his insurance would not cover the bills. Kelly and Chanelle went to Las Vegas and won $5,000 at the blackjack table. The next night, they lost $6,000. Kelly and Chanelle gave $900 to their church and during the year, they had the fol- lowing other income and expenses: Real estate taxes $1,400 500 Property taxes on car (determined by value) 9,000 Home mortgage interest 2,600 Credit card finance charges 1,000 Tax return preparation fees ($600 is allocable to Chanelle's business) 6,200 Sales tax on purchases during the year 800 Interest from a savings account 700 Interest from City of Boston Bonds 400 Dividend from 3M stock > Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started