plesse use the 2020 rates. file a 2020 tax return.
you are only reauired to prepare the federal income tax return for 2020.
Nelson Munse (SSN 123-45-6789) and his wife Lisa (SSN 987-65-4321), both age 37 live at 222 Grifin Blvd in Springfield, NC 28451. They have two children, son, Bart. who is 12 years old (SSN 543-21-6789) and daughter, Mags, who is 14 years old (SSN 241-89-1225). The couple financially supports Lisa's mother, Marge Bouvia age 77 (SSN 123-98-4567), who lives with them. Marge works one day each week at the local library, earning a total of $2.160. Nelson's gross salary from his corporate employer was $56,000. He does not contribute to an IRA. His Form W-2 shows $3,900 withheld for federal income taxes and $2,600 for state income taxes. Lisa is a local animal activist, earning a gross salary of $24,000. She does not contribute to a 401(k) plan. Her Form W-2 from shows $3,000 withheld for federal income taxes and $1,000 for state income taxes. During a business trip Nelson gambled for one hour at the blackjack tables, where he won $5,000. Later that year, Lisa and some friends took a trip to Cherokee, NC, where she lost $12,000 at the craps table. Neither of them gambled at any other time that year. Nelson sold 3000 shares of Bully Inc stock this year. He received a Form 1099-B from his broker reporting the sale. He sold the stock for $10,000 on 8/28/20. He had originally purchased the shares on 8/10/2017 for $8,000. Lisa sold Wiggam Wraper Ltd. stock for $12,500 on 11/30/20, that she inherited from her father on 1/23/05, when the FMV of the stock was 23,000. Nelson's corporate employer wanted to keep him from quitting so they offered him a 5000 share Restricted Stock option on 7/2/20. The FMV of the stock on this date was $7.00 and the exercise date is 7/23/21. He talked with Lisa about the option and they decided not to make the 83b election. Lisa also had qualified business income in the amount of $10,000 ordinary income, from Krustyburger Inc. EIN 22-6667777, a S-corporation, Lisa takes an active role in the company. They had itemized deductions greater than the standard deduction by $2500 due to state tax deductions on their return last year (2019). Other information for 2020 that may be relevant is provided below: Health insurance premiums paid to Blue Cross Blue Shield $1,800 Medical expenses (e.g., physicians and prescription medications) not reimbursed by insurance $2800 Interest paid on home mortgage (reported by bank on Form 1098) $6,260 Interest on car loan $3,000 . . . O Property taxes on personal residence Property taxes paid on the family Audi sedan Loss on sale of the family's old 1999 Honda Civic Property taxes paid on family boat State income tax refund received in 2020 from 2019 tax filing Total cash contributions to the Lovejoyl church (paid by check) Fair market value of clothing donated to Goodwill Cash gift received from Lisa's brother after he won the lottery Cash gift paid to Millhouse to celebrate the birth of a son Interest earned on Wells Fargo bank savings account Interest earned on a City of Southport bond Child support paid to Nelsons' former wife (Lucy, SSN 888-77-6655), who has full custody of the children from his first marriage (divorced on 7/8/2015) $4,550 $1,350 $9,000 $2,125 $1,123 $5,000 $250 $42,000 $25,000 $4,290 $50 o $2,000 Required: Access and print all necessary forms and schedules from the IRS webpage (www.irs.gov) or from Canvas, review and prepare a joint Form 1040 (Federal Income Tax return) with all appropriate schedules for the Munse for the 2020 tax year. Even if the itemized deductions result in a $0 deduction, complete the Schedule A and turn it in. If they are due a refund, you can assume they want it to be sent to them (not applied towards next year's tax). You may assume that they do not wish to contribute to the Presidential Election Campaign Fund, that alternative minimum tax (AMT) equals zero, and that they do not qualify for the earned income credit. Calculate tax due based on the 2020 rate schedules provided and in the book. Also, remember to use whole dollars on your forms (no pennies!). You are only required to prepare the federal income tax return. You do not have to prepare a state tax return, or a return for any other type of tax. You may ignore the new Medicare taxes (the Net Investment Income tax and the Additional Medicare Tax). Nelson Munse (SSN 123-45-6789) and his wife Lisa (SSN 987-65-4321), both age 37 live at 222 Grifin Blvd in Springfield, NC 28451. They have two children, son, Bart. who is 12 years old (SSN 543-21-6789) and daughter, Mags, who is 14 years old (SSN 241-89-1225). The couple financially supports Lisa's mother, Marge Bouvia age 77 (SSN 123-98-4567), who lives with them. Marge works one day each week at the local library, earning a total of $2.160. Nelson's gross salary from his corporate employer was $56,000. He does not contribute to an IRA. His Form W-2 shows $3,900 withheld for federal income taxes and $2,600 for state income taxes. Lisa is a local animal activist, earning a gross salary of $24,000. She does not contribute to a 401(k) plan. Her Form W-2 from shows $3,000 withheld for federal income taxes and $1,000 for state income taxes. During a business trip Nelson gambled for one hour at the blackjack tables, where he won $5,000. Later that year, Lisa and some friends took a trip to Cherokee, NC, where she lost $12,000 at the craps table. Neither of them gambled at any other time that year. Nelson sold 3000 shares of Bully Inc stock this year. He received a Form 1099-B from his broker reporting the sale. He sold the stock for $10,000 on 8/28/20. He had originally purchased the shares on 8/10/2017 for $8,000. Lisa sold Wiggam Wraper Ltd. stock for $12,500 on 11/30/20, that she inherited from her father on 1/23/05, when the FMV of the stock was 23,000. Nelson's corporate employer wanted to keep him from quitting so they offered him a 5000 share Restricted Stock option on 7/2/20. The FMV of the stock on this date was $7.00 and the exercise date is 7/23/21. He talked with Lisa about the option and they decided not to make the 83b election. Lisa also had qualified business income in the amount of $10,000 ordinary income, from Krustyburger Inc. EIN 22-6667777, a S-corporation, Lisa takes an active role in the company. They had itemized deductions greater than the standard deduction by $2500 due to state tax deductions on their return last year (2019). Other information for 2020 that may be relevant is provided below: Health insurance premiums paid to Blue Cross Blue Shield $1,800 Medical expenses (e.g., physicians and prescription medications) not reimbursed by insurance $2800 Interest paid on home mortgage (reported by bank on Form 1098) $6,260 Interest on car loan $3,000 . . . O Property taxes on personal residence Property taxes paid on the family Audi sedan Loss on sale of the family's old 1999 Honda Civic Property taxes paid on family boat State income tax refund received in 2020 from 2019 tax filing Total cash contributions to the Lovejoyl church (paid by check) Fair market value of clothing donated to Goodwill Cash gift received from Lisa's brother after he won the lottery Cash gift paid to Millhouse to celebrate the birth of a son Interest earned on Wells Fargo bank savings account Interest earned on a City of Southport bond Child support paid to Nelsons' former wife (Lucy, SSN 888-77-6655), who has full custody of the children from his first marriage (divorced on 7/8/2015) $4,550 $1,350 $9,000 $2,125 $1,123 $5,000 $250 $42,000 $25,000 $4,290 $50 o $2,000 Required: Access and print all necessary forms and schedules from the IRS webpage (www.irs.gov) or from Canvas, review and prepare a joint Form 1040 (Federal Income Tax return) with all appropriate schedules for the Munse for the 2020 tax year. Even if the itemized deductions result in a $0 deduction, complete the Schedule A and turn it in. If they are due a refund, you can assume they want it to be sent to them (not applied towards next year's tax). You may assume that they do not wish to contribute to the Presidential Election Campaign Fund, that alternative minimum tax (AMT) equals zero, and that they do not qualify for the earned income credit. Calculate tax due based on the 2020 rate schedules provided and in the book. Also, remember to use whole dollars on your forms (no pennies!). You are only required to prepare the federal income tax return. You do not have to prepare a state tax return, or a return for any other type of tax. You may ignore the new Medicare taxes (the Net Investment Income tax and the Additional Medicare Tax)
