Question 4 - Form 1040 + Schedule C

Tom Doe is divorced and has the following tax information for 2016.

Tom's address is 123 Main Street, Columbia, MD 12345

Tom's social security number is 123-45-6789. Tom's occupation is a CEO of a small not for profit entity.

Tom's 9 year old son, Sawyer, lives with him year-round and Tom has sole custody. Sawyers social security number is 987-65-4321. Tom claims the exemption for his son.

Wages

Tom's 2016 wage was $70,000.

Federal taxes withheld was $6,000

State taxes withheld was $3,000

Other income

The not for profit where Tom worked folded in the second half of 2016. Tom received Unemployment Compensation of $1,000 per month for three months. (No taxes were withheld).

After unemployment compensation ended, Tom performed several independent contractor jobs as a fundraising consultant. He earned $4,000. He only tracked five expenses. He drove his car 500 miles related to the jobs, parking tickets were $190, new business suit for consulting $300, business cards and web design was $500 and an ad in a local magazine was $200. Ignore self-employment taxes.

Other Information

Alimony paid by Tom = $6,000. His ex-spouses social security number is 111 22 3333

Tom contributed $2,000 to a Roth IRA during 2016.

Tom takes the standard deduction (does not itemize).

Tom paid taxes to a foreign country (on investments) of $50 during the year. Since he is not itemizing his deductions, can he get a tax benefit from these foreign taxes? If yes, report on tax return.

Sawyer's before/after school child care expenses = Zero. His grandparents take care of him during this time.

The child tax credit is $1,000 and goes on line 52 of Form 1040. Form 8812 is not required.