Practice Problem - Individual Income Tax

Juan Santos Blin (546-33-9898) is married to Martha Rosado Borges (546-33-9999) and they both reside together in Puerto Rico. Juan provides 80% of the support to his in-laws, who live in a care home in another town. Her in-laws are Mara Borges (545-46-9898) and Carlos Rosado (546-09-0909). They were born on August 8, 1932 and November 30, 1941, respectively. Juan has a son from a previous marriage and pays him alimony of 10,000 annually. His name is Hctor Santos (23-35-6767) and his ex-wife has custody.

Juan and Martha also have three children, who they support; Maritza (465-88-9090), is 25 years old, a full-time college student and earns $7,000. Felipe is 16 years old and does not study and Carlos is 17 years old and earns 2,000 dollars.

Received an inheritance of $2,000, and benefit income from a life insurance policy as beneficiary of $5,000.

Juan earned salaries as an engineer of $95,000 during the current taxable year. The contribution withheld was $11,000.

Both generated interest income from a certificate of Deposit in Banco Popular de PR of $1,200.

His wife is an engineer and has an income of 45,000 with a withheld contribution of 10,0000.

Date of birth: Both were born on May 5, 1962 and live in the Playa Grande Urbanization, green street, B-4, Dorado, PR 00978.

Additionally, these taxpayers incurred the following expenses:

Medical Plan payments for the entire family $12,000 Medical equipment for your mother-in-law's treatment $15,000 Mother-in-law's medicines $3,000 Sunglasses for the couple $400 Eyeglasses for one of the children $400 Loss of your primary residence due to flooding declared as an emergency situation $3,000 and received an insurance reimbursement of $1,000. Loss of personal property and appliances due to flooding for $8,000 Interest on Martha's Student Loans $300 Cash donations to Cristo Rema Church $1,000 Donations to your sick neighbor Alberto Reyes $500 Donations to the Casa Cuna $500 Contribution to IRA Account $7,000 each Contribution to Juan's retirement system $7,000 Mortgage Interest on your primary residence $18,000

Required: Please complete the individual income tax form and its corresponding schedules.