Print 1. TRP.04.56 (Algorithmic) Instructions Form 1040 Schedule 1 Schedule B Qualified Dividends and Capital Gain Tax Worksheet 2020 Tax Rate Schedules Tax Planning Instructions Note: This problem is for the 2020 tax year. Daniel B. Butler and his spouse Freida C. Butler file a joint return. The Butlers live at 625 Oak Street in Corbin, KY 40701. Dan's Social Security number is 111-11-1112, and Freida's is 123-45-5780. Dan was born on January 15, 1969, and Freida was born on August 20, 1970. During 2020, Dan and Freida furnished over half of the total support of each of the following individuals, all of whom still live at home: a. Gina, their daughter, age 22, a full-time student, who married on December 21, has no income of her own and did not file a joint return with her husband, Casey, who earned $10,600 during 2020. Gina's Social Security number is 123-45-6788. b. Willie, their son, age 19, graduated high school in May 2020. He is taking a leap year and will not begin college until 2021. He had gross income of $6,300 in 2020. Willie's Social Security number is 123-45-6787. c. Ben, their oldest son, age 25, is a full-time graduate student with gross income of $5,200. Ben's Social Security number is 123-45-6786. Dan was employed as a manager by W]]], Inc. (employer identification number 11-1111111, 604 Franklin Street, Corbin, KY 40702), and Freida was employed as a salesperson for Corbin Realty, Inc. (employer identification number 98-7654321, 899 Central Street, Corbin, KY 40701). Selected information from the W-2 forms provided by the employers is presented below. Dan and Freida use the cash method. Line Description Dan Freida 1 $74,000 $86,000 Wages, tips, other compensation Federal income tax withheld 2 11,000 12,400 17 State income tax withheld 2,960 3,440 Freida sold a house on December 30, 2020, and will be paid a commission of $3,100 (not included in the $85,000 reported on the W-2) on the January 10, 2021, closing date. Other income (as reported on 1099 Forms) for 2020 consisted of the following: $4,200 Dividends on CSX stock (qualified) Interest on savings at Second Bank Interest on City of Corbin bonds 1,600 900 Interest on First Bank CD 382 The $382 from First Bank was an original issue discount. Dan and Freida collected $16,000 on the First Bank CD that matured on September 30, 2020. The CD was purchased on October 1, 2018, for $14,995, and the yield to maturity was 3.3%. Dan participated on a game show and won a cash prize of $7,000. In addition to the above information, Dan and Freida's itemized deductions included the following: $700 600 Paid on 2020 Kentucky income tax Personal property tax paid Real estate taxes paid Interest on home mortgage (Corbin S&L) 1,800 4,900 Sales tax from the sales tax table is $1,860. Dan and Freida made Federal estimated tax payments of $8,000. They have never owned or used any virtual currency, and they do not wish to contribute to the Presidential Election Campaign. For 2020, they received the correct amount of economic impact payments (2020 recovery credits). The Kentucky income tax rate is 4% Required: Compute Dan and Freida's 2020 Federal income tax payable (or refund due). Use Form 1040 and Schedules 1, B and the Qualified Dividends and Capital Gain Tax Worksheet to complete this tax return. If there is a tax overpayment, the Butlers would like a refund. If additional tax is due, assume no underpayment penalty applies. It may be necessary to complete the tax schedules before completing Form 1040. Enter all amounts as positive numbers. If an amount box does not require an entry or the answer is zero, enter "o". When computing the tax liability, do not round your immediate calculations. If required, round your answers to the nearest dollar. Make realistic assumptions about any missing data. Use the Tax Rate Schedule provided. Do not use the Tax Tables. TAX RETURN ASSIGNMENT Introduction: This is a basic tax return that is intended to introduce you to Form 1040 and other tax forms. Completion will prepare you for the tax return projects that are required for this course. To be eligible for the credit, the child must be under age 17, must be a U.S. citizen, and must be a dependent of the taxpayer. In addition, a $500 tax credit is allowed for each dependent of the taxpayer (other than a qualifying child). For purposes of the dependent tax credit, these qualifying relatives must be a U.S. citizen, a U.S. national, or a U.S. resident. Preparation: It is strongly recommended that you complete the Chapter 3 tax return practice problems assignment in CNow (Introduction to Tax Returns problem), BEFORE you attempt this assignment; read, review and complete the assignment then submit it in order to see the detailed feedback offered by CNow. 3. Dan was employed as a manager by WJJJ, Inc. (employer identification number 11-1111111, 604 Franklin Street, Corbin, KY 40702), and Freida was employed as a salesperson for Corbin Realty, Inc. (employer identification number 98-7654321, 899 Central Street, Corbin, KY 40701). Selected information from the W-2 forms provided by the employers is presented below. Dan and Freida use the cash method. Line Description Dan Freida 1 Wages, tips, other compensation $74,000 $86,000 2 Federal income tax withheld 11,000 12,400 17 State income tax withheld 2,960 3,440 Para 3 The taxpayers' employment information is provided. HINT: wages appear on page 1 of the 1040, federal withholding appears on page 2 of the 1040, state withholding (if greater than state sales tax paid), appears on Schedule A (if the taxpayers itemize instead of taking the standard deduction) 4. Freida sold a house on December 30, 2020, and will be paid a commission of $3,100 (not included in the $86,000 reported on the W-2) on the January 10, 2021, closing date. Since the taxpayers are on the cash basis of accounting, this income gets reported in the year it is RECEIVED - 2021. Instructions: Access the assignment through CNow. Read the problem, instructions and requirements. NOTE: You have 3 check my work feedback opportunities. HOWEVER, it is 3 checks for the ENTIRE assignment. NOT for each tax form or schedule. Using CengageNowyou are to prepare a 2020 Form 1040, Schedule 1, Schedule B, Qualified Dividends and Long Term Capital Gain Tax Worksheet. My suggestion is that you go to IRS.gov and print out the forms. Attempt to complete the return on these printed forms, and then transfer the information in CNow. I guarantee it will be much easier for you! Next step-start your return! In order to assist with your assignment, I have copied the facts, numbered each section, and then added my own notes, highlighted in yellow below, for guidance. Note: This problem is for the 2020 tax year. 1. Daniel B. Butler and his spouse Freida C. Butler file a joint return. The Butlers live at 625 Oak Street in Corbin, KY 40701. Dan's Social Security number is 111-11-1112, and Freida's is 123- 45-6780. Dan was born on January 15, 1969, and Freida was born on August 20, 1970. Para 1 provides you with information needed for the top part of Form 1040. 2. During 2020, Dan and Freida furnished over half of the total support of each of the following individuals, all of whom still live at home: a. Gina, their daughter, age 22, a full-time student, who married on December 21, has no income of her own and did not file a joint return with her husband, Casey, who earned $10,600 during 2020. Gina's Social Security number is 123-45-6788. b. Willie, their son, age 19, graduated high school in May 2020. He is taking a leap year and will not begin college until 2021. He had gross income of $6,300 in 2020. Willie's Social Security number is 123-45-6787. C. Ben, oldest son, age 26, is a full-time graduate student with gross income of $5,200. Ben's Social Security number is 123-45-6786. You need to determine which, if any of the above, are dependents. Apply the rules in Chapter to these facts. All dependents need to be listed on page 1 of Form 1040. In addition, don't forget about the Child and Dependent Tax Credit from Chapter 3. Here's some information to assist in calculating the credit: The child tax credit and dependent tax credit are provided to individual taxpayers based on the number of their qualifying children and dependents. A $2,000 tax credit is allowed for each qualifying child (including stepchildren and foster children). 5. Other income (as reported on 1099 Forms) for 2020 consisted of the following: Dividends on CSX stock (qualified) $4,200 Interest on savings at Second Bank 1,600 Interest on City of Corbin bonds 900 Interest on First Bank CD 382 The $382 from First Bank was an original issue discount. This is taxable interest. Dan and Freida collected $16,000 on the First Bank CD that matured on September 30, 2020. The CD was purchased on October 1, 2018, for $14,995, and the yield to maturity was 3.3%. The solution disregards any additional earnings that may have been earned on the CD. Please disregard the two sentences above. Interest income and dividend income are reported on Schedule B of Form 1040. Generally, qualified dividends received are taxed at the same marginal rate as is applied to net long-term capital gains. The special tax rates for net long-term capital gains and qualified dividends. As a result, the tax rate applied to a long-term capital gain or qualified dividends will depend on the taxpayer's regular income tax rate and may cross marginal rates brackets. The 15% preferential rate applies for the Butlers. In order to calculate the tax, you need to complete the Qualified Dividends and Capital Gain Tax Worksheet. 6. Dan participated on a game show and won a cash prize of $7,000. Other income is reported on Schedule 1. . 7. In addition to the above information, Dan and Freida's itemized deductions included the following: Paid on 2020 Kentucky income tax $700 Personal property tax paid 600 Print 1. TRP.04.56 (Algorithmic) Instructions Form 1040 Schedule 1 Schedule B Qualified Dividends and Capital Gain Tax Worksheet 2020 Tax Rate Schedules Tax Planning Instructions Note: This problem is for the 2020 tax year. Daniel B. Butler and his spouse Freida C. Butler file a joint return. The Butlers live at 625 Oak Street in Corbin, KY 40701. Dan's Social Security number is 111-11-1112, and Freida's is 123-45-5780. Dan was born on January 15, 1969, and Freida was born on August 20, 1970. During 2020, Dan and Freida furnished over half of the total support of each of the following individuals, all of whom still live at home: a. Gina, their daughter, age 22, a full-time student, who married on December 21, has no income of her own and did not file a joint return with her husband, Casey, who earned $10,600 during 2020. Gina's Social Security number is 123-45-6788. b. Willie, their son, age 19, graduated high school in May 2020. He is taking a leap year and will not begin college until 2021. He had gross income of $6,300 in 2020. Willie's Social Security number is 123-45-6787. c. Ben, their oldest son, age 25, is a full-time graduate student with gross income of $5,200. Ben's Social Security number is 123-45-6786. Dan was employed as a manager by W]]], Inc. (employer identification number 11-1111111, 604 Franklin Street, Corbin, KY 40702), and Freida was employed as a salesperson for Corbin Realty, Inc. (employer identification number 98-7654321, 899 Central Street, Corbin, KY 40701). Selected information from the W-2 forms provided by the employers is presented below. Dan and Freida use the cash method. Line Description Dan Freida 1 $74,000 $86,000 Wages, tips, other compensation Federal income tax withheld 2 11,000 12,400 17 State income tax withheld 2,960 3,440 Freida sold a house on December 30, 2020, and will be paid a commission of $3,100 (not included in the $85,000 reported on the W-2) on the January 10, 2021, closing date. Other income (as reported on 1099 Forms) for 2020 consisted of the following: $4,200 Dividends on CSX stock (qualified) Interest on savings at Second Bank Interest on City of Corbin bonds 1,600 900 Interest on First Bank CD 382 The $382 from First Bank was an original issue discount. Dan and Freida collected $16,000 on the First Bank CD that matured on September 30, 2020. The CD was purchased on October 1, 2018, for $14,995, and the yield to maturity was 3.3%. Dan participated on a game show and won a cash prize of $7,000. In addition to the above information, Dan and Freida's itemized deductions included the following: $700 600 Paid on 2020 Kentucky income tax Personal property tax paid Real estate taxes paid Interest on home mortgage (Corbin S&L) 1,800 4,900 Sales tax from the sales tax table is $1,860. Dan and Freida made Federal estimated tax payments of $8,000. They have never owned or used any virtual currency, and they do not wish to contribute to the Presidential Election Campaign. For 2020, they received the correct amount of economic impact payments (2020 recovery credits). The Kentucky income tax rate is 4% Required: Compute Dan and Freida's 2020 Federal income tax payable (or refund due). Use Form 1040 and Schedules 1, B and the Qualified Dividends and Capital Gain Tax Worksheet to complete this tax return. If there is a tax overpayment, the Butlers would like a refund. If additional tax is due, assume no underpayment penalty applies. It may be necessary to complete the tax schedules before completing Form 1040. Enter all amounts as positive numbers. If an amount box does not require an entry or the answer is zero, enter "o". When computing the tax liability, do not round your immediate calculations. If required, round your answers to the nearest dollar. Make realistic assumptions about any missing data. Use the Tax Rate Schedule provided. Do not use the Tax Tables. TAX RETURN ASSIGNMENT Introduction: This is a basic tax return that is intended to introduce you to Form 1040 and other tax forms. Completion will prepare you for the tax return projects that are required for this course. To be eligible for the credit, the child must be under age 17, must be a U.S. citizen, and must be a dependent of the taxpayer. In addition, a $500 tax credit is allowed for each dependent of the taxpayer (other than a qualifying child). For purposes of the dependent tax credit, these qualifying relatives must be a U.S. citizen, a U.S. national, or a U.S. resident. Preparation: It is strongly recommended that you complete the Chapter 3 tax return practice problems assignment in CNow (Introduction to Tax Returns problem), BEFORE you attempt this assignment; read, review and complete the assignment then submit it in order to see the detailed feedback offered by CNow. 3. Dan was employed as a manager by WJJJ, Inc. (employer identification number 11-1111111, 604 Franklin Street, Corbin, KY 40702), and Freida was employed as a salesperson for Corbin Realty, Inc. (employer identification number 98-7654321, 899 Central Street, Corbin, KY 40701). Selected information from the W-2 forms provided by the employers is presented below. Dan and Freida use the cash method. Line Description Dan Freida 1 Wages, tips, other compensation $74,000 $86,000 2 Federal income tax withheld 11,000 12,400 17 State income tax withheld 2,960 3,440 Para 3 The taxpayers' employment information is provided. HINT: wages appear on page 1 of the 1040, federal withholding appears on page 2 of the 1040, state withholding (if greater than state sales tax paid), appears on Schedule A (if the taxpayers itemize instead of taking the standard deduction) 4. Freida sold a house on December 30, 2020, and will be paid a commission of $3,100 (not included in the $86,000 reported on the W-2) on the January 10, 2021, closing date. Since the taxpayers are on the cash basis of accounting, this income gets reported in the year it is RECEIVED - 2021. Instructions: Access the assignment through CNow. Read the problem, instructions and requirements. NOTE: You have 3 check my work feedback opportunities. HOWEVER, it is 3 checks for the ENTIRE assignment. NOT for each tax form or schedule. Using CengageNowyou are to prepare a 2020 Form 1040, Schedule 1, Schedule B, Qualified Dividends and Long Term Capital Gain Tax Worksheet. My suggestion is that you go to IRS.gov and print out the forms. Attempt to complete the return on these printed forms, and then transfer the information in CNow. I guarantee it will be much easier for you! Next step-start your return! In order to assist with your assignment, I have copied the facts, numbered each section, and then added my own notes, highlighted in yellow below, for guidance. Note: This problem is for the 2020 tax year. 1. Daniel B. Butler and his spouse Freida C. Butler file a joint return. The Butlers live at 625 Oak Street in Corbin, KY 40701. Dan's Social Security number is 111-11-1112, and Freida's is 123- 45-6780. Dan was born on January 15, 1969, and Freida was born on August 20, 1970. Para 1 provides you with information needed for the top part of Form 1040. 2. During 2020, Dan and Freida furnished over half of the total support of each of the following individuals, all of whom still live at home: a. Gina, their daughter, age 22, a full-time student, who married on December 21, has no income of her own and did not file a joint return with her husband, Casey, who earned $10,600 during 2020. Gina's Social Security number is 123-45-6788. b. Willie, their son, age 19, graduated high school in May 2020. He is taking a leap year and will not begin college until 2021. He had gross income of $6,300 in 2020. Willie's Social Security number is 123-45-6787. C. Ben, oldest son, age 26, is a full-time graduate student with gross income of $5,200. Ben's Social Security number is 123-45-6786. You need to determine which, if any of the above, are dependents. Apply the rules in Chapter to these facts. All dependents need to be listed on page 1 of Form 1040. In addition, don't forget about the Child and Dependent Tax Credit from Chapter 3. Here's some information to assist in calculating the credit: The child tax credit and dependent tax credit are provided to individual taxpayers based on the number of their qualifying children and dependents. A $2,000 tax credit is allowed for each qualifying child (including stepchildren and foster children). 5. Other income (as reported on 1099 Forms) for 2020 consisted of the following: Dividends on CSX stock (qualified) $4,200 Interest on savings at Second Bank 1,600 Interest on City of Corbin bonds 900 Interest on First Bank CD 382 The $382 from First Bank was an original issue discount. This is taxable interest. Dan and Freida collected $16,000 on the First Bank CD that matured on September 30, 2020. The CD was purchased on October 1, 2018, for $14,995, and the yield to maturity was 3.3%. The solution disregards any additional earnings that may have been earned on the CD. Please disregard the two sentences above. Interest income and dividend income are reported on Schedule B of Form 1040. Generally, qualified dividends received are taxed at the same marginal rate as is applied to net long-term capital gains. The special tax rates for net long-term capital gains and qualified dividends. As a result, the tax rate applied to a long-term capital gain or qualified dividends will depend on the taxpayer's regular income tax rate and may cross marginal rates brackets. The 15% preferential rate applies for the Butlers. In order to calculate the tax, you need to complete the Qualified Dividends and Capital Gain Tax Worksheet. 6. Dan participated on a game show and won a cash prize of $7,000. Other income is reported on Schedule 1. . 7. In addition to the above information, Dan and Freida's itemized deductions included the following: Paid on 2020 Kentucky income tax $700 Personal property tax paid 600