Prepare an income tax return (with all appropriate forms and schedules) for the Smiths for 2015 following these guidelines

Alice J. and Bruce M. Smith are married taxpayers who file a joint return. Their Social Security numbers are 123-45-6789 and 111-11-1111, respectively. Alice's birthday is September 21, 1968, and Bruce's is June 27, 1967. They live at 473 Pierre Avenue, Anytown, CA 91850. Alice is the office manager for Dowell Dental Clinic, 733 Some Street, Anytown, CA 91850 (employer identification number 12-7654321). Bruce is the manager of a Super Burgers fast-food outlet owned and operated by Mercury Corporation, 1247 University Avenue, Hauppauge, CA 11788 (employer identification number 11-1111111).

The following information is shown on their Wage and Tax Statements (Form W2) for 2015. Line Description Alice Bruce

1 Wages, tips, other compensation $58,000 $62,100

2 Federal income tax withheld 4,500 6,300

3 Social Security wages 58,000 62,100

4 Social Security tax withheld 3,596 3,850

5 Medicare wages and tips 58,000 62,100

6 Medicare tax withheld 841 900

15 State California California

16 State wages, tips, etc. 58,000 62,100

17 State income tax withheld 2,950 3,100

The Smiths provide over half of the support of their two children, Cynthia (born January 25, 1991, Social Security number 123-45-6788) and John (born February 7, 1995, Social Security number 123-45-6786). Both children are full-time students and live with the Smiths except when they are away at college. Cynthia earned $4,200 from a summer internship in 2015, and John earned $3,800 from a part-time job

During 2015, the Smiths provided 60% of the total support of Bruce's widower father, Sam Smith (born March 6, 1939, Social Security number 123-45-6787). Sam lived alone and covered the rest of his support with his Social Security benefits. Sam died in November, and Bruce, the beneficiary of a policy on Sam's life, received life insurance proceeds of $800,000 on December 28

The Smiths had the following expenses relating to their personal residence during 2015:

Property taxes $5,000

Qualified interest on home mortgage 8,700

Repairs to roof 5,750

Utilities 4,100

Fire and theft insurance 1,900

The Smiths had the following medical expenses for 2015:

Medical insurance premiums $4,500

Doctor bill for Sam incurred in 2014 and not paid until 2015 7,600

Operation for Sam 8,500

Prescription medicines for Sam 900

Hospital expenses for Sam 3,500

Reimbursement from insurance company, received in 2015 3,600

The medical expenses for Sam represent most of the 60% that Bruce contributed toward his father's support.

Other relevant information follows:

When they filed their 2014 state return in 2015, the Smiths paid additional state income tax of $900. During 2015, Alice and Bruce attended a dinner dance sponsored by the Anytown Police Disability Association (a qualified charitable organization). The Smiths paid $300 for the tickets. The cost of comparable entertainment would normally be $50. The Smiths contributed $6,000 to Anytown Presbyterian Church and gave used clothing (cost of $1,200 and fair market value of $350) to the Salvation Army. All donations are supported by receipts, and the clothing is in very good condition. In 2015, the Smiths received interest income of $2,750, which was reported on a Form 1099INT from Third National Bank. In 2015, the Smiths received dividend income of $1,000. Of that amount, $750 are qualified dividends. In December 2015, the Smiths dog knocked over a lit candle which caused damage to their living room. The Smiths paid a contractor $15,000 to make repairs but were not reimbursed for any of the damage by their insurance company. Page 3 of 3 Alice's employer requires that all employees wear uniforms to work. During 2015, Alice spent $850 on new uniforms and $566 on laundry charges. Bruce paid $400 for an annual subscription to the Journal of Franchise Management and $741 for annual membership dues to his professional association. Neither Alice's nor Bruce's employer reimburses for employee expenses. The Smiths do not keep the receipts for the sales taxes they paid and had no major purchases subject to sales tax. All members of the Smith family had health insurance coverage for all of 2015. Alice and Bruce paid no estimated Federal income tax. Neither Alice nor Bruce wants to designate $3 to the Presidential Election Campaign Fund.

The Byrds provide over half of the support of their two children, Cynthia (born January 25, 1986, Social Security number 123-45-6788) and John (born February 7, 1990, social Security number 123-45-6786. Both children are full-time students and live with the Byrds except when they are away at college. Cynthia earned $3,700 from a summer internship in 2010, and John earned $3,400 from a part-time job. During 2010, the Byrds furnished 60% of the total support of Bruces widower father, Sam Byrds ( born March 6, 1934, Social Security number 123-45-6787). Sam lived alone and covered the rest of his support with Social Security benefits. Sam died in November, and Bruce, the beneficiary of a policy on Sams life, received life insurance proceeds of $600,000 on December 28. The Byrds had the following expenses relating to their personal residence during 2010: Property taxes $4,720 Qualified interest on home mortgage 9,130 Repairs of roof 4,780 Utilities 3,810 Fire and theft insurance 2,290 The following facts relate to medical expenses for 2010: Medical insurance premiums $4,380 Doctor bill for Sam incurred in 2009 and not paid until 2010 7,760 Operation for Sam 7,310 Prescription medicines for Sam 860 Hospital expenses for Sam 2,850 Reimbursement from insurance company, received in 2010 3,000 The medical expenses for Sam represent most of the 60% Bruce contributed toward his fathers support. Other relevant information follows: When they filed their 2009 state return in 2010, the Byrds paid additional state income tax of $950. During 2010, Alice and Bruce attended a dinner dance sponsored by the Ames police Disability Association ( a qualified charitable organization). The Byrds paid $400 for the tickets. The cost of comparable entertainment would normally be $160. The Byrds contributed $4,800 to Ames Presbyterian Church and gave used clothing (cost of $1,100 and fair market value of $450) to the Salvation Army. All donations are supported by receipts and are in very good condition. In 2010, the Byrds received interest income of $2,695, which was reported on a Form 1099-INT from Second National Bank. Alices employer requires that all employees wear uniforms to work. During 2010, Alice spent $482 on new uniforms and $211 on laundry charges. Bruce paid $320 for an annual subscription to the Journal of Franchise Management. Neither Alices nor Bruces employer reimburses for employee expenses. The Byrds do not keep the receipts for the sales taxes they paid and had no major purchases subject to sales tax. Alice and Bruce paid no estimated Federal income tax. Neither Alice nor Bruce wishes to designate $3 to the Presidential Election Campaign Fund.