Question
Question is how do I complete the following forms with the following scenario? 1. Form 1040 2. Schedule 1 3. Schedule 3 4. Schedule B
Question is how do I complete the following forms with the following scenario?
1. Form 1040
2. Schedule 1
3. Schedule 3
4. Schedule B
5. Schedule C
6. Schedule SE
Scenario:
In 2020, Han (SSN 000-11-1111) and Leia (SSN 000-22-2222) were married for the entire year. They have one child, Ben Solo (SSN 000-33-3333), who was age 19 at the end of 2020 who is also a full time student at Death Star University majoring where his parents provided more than 50% of his support. Ben Solo was unmarried at the end of 2020 and reported no income for the year. The Solos will not claim the Education Credit for Ben Solo. The Solos also had their 40 year old friend, Chewbacca, living with them for 10 months out of the year since getting laid off as a copilot from his aviation job. The Solos provided more than ½ of his support. Chewbacca made $1,000 in 2020 in W2 wages.
The Solos' residential and mailing address is: 2000 Millenium Falcon Way, Mustafar, MD 24629
The following income and itemized deductions were incurred during tax year 2020:
Taxpayer | Employer | W-2 Income | Federal Taxes W/H |
Han Solo | Jabba's Hut | $100,000 | $21,000 |
Leia Solo | Wookie, LLC | $5,500 | $1,500 |
Taxpayer | Payor | 1099-Int (interest income) | Federal Taxes W/H |
Leia Solo | Imperial Savings | $2,000 | $0 |
Leia Solo | Skywalker Savings | $7,000 (from municipal bonds) | $0 |
The Solos do not hold any foreign financial assets, trust or bank accounts in a foreign county.
Itemized Expenses | Itemized Deductions |
Mortgage Interest | $12,000 |
Property Taxes | $5,000 |
The standard deduction for 2020 is $24,800. Remember, you can only claim either the higher of itemized deductions or the standard.
Leia Solo's also reported Self Employment income from Uber. Leia drives her car for both business and personal use. Here is the following info:
Gross Receipts | $10,000 |
Insurance | $350 (business portion) |
Car Repairs | $450 (business portion) |
Business License | $120 |
Business Usage of Cell Phone | $200 |
Commuting Miles | Business Miles | Total Miles Driven |
7,000 | 5,000 | 12,000 |
Since Leia was not consistently performing as an Uber driver for the year, she has elected to NOT claim the Qualified Business Income Deduction (Form 8995). She will not elect to depreciate her vehicle since she will be claiming mileage.
Leia also made estimated Federal tax payments totaling $1,000 for tax year 2020.
Forms are below:
Form 1040
Schedule 1
Schedule 3
Schedule B
Schedule C
Schedule SE
Department of the Treasury-Internal Revenue Service (99) 1040 U.S. Individual Income Tax Return 2020 Filing Status Single Married filing jointly Married filing separately (MFS) Check only one box. Your first name and middle initial If joint return, spouse's first name and middle initial Home address (number and street). If you have P.O. box, see instructions. City, town, or post office. If you have a foreign address, also complete spaces below. Foreign country name If more than four dependents, OMB No. 1545-0074 IRS Use Only-Do not write or staple in this space. Head of household (HOH) Qualifying widow(er) (QW) If you checked the MFS box, enter the name of your spouse. If you checked the HOH or QW box, enter the child's name the qualifying person is a child but not your dependent Last name Age/Blindness You: Were born before January 2, 1956 Dependents (see instructions): (1) First name see instructions and check here Attach Sch. Bif required. Standard Deduction for- Single or Married filing separately. $12,400 Married filing jointly or Qualifying widow(er), $24,800 Head of household, $18,650 At any time during 2020, did you receive, sell, send, exchange, or otherwise acquire any financial interest in any virtual currency? Yes Standard Someone can claim: You as a dependent Deduction Spouse itemizes on a separate return or you were a dual-status alien If you checked any box under Standard Deduction, see instructions. Last name 10 Last name 11 12 13 14 15 State Foreign province/state/county 2a 3a 4a 5a 6a . Your spouse as a dependent Are blind Spouse: (2) Social security number 1 Wages, salaries, tips, etc. Attach Form(s) W-2 2a Tax-exempt interest .. b Taxable interest 3a Qualified dividends b Ordinary dividends 4a IRA distributions . b Taxable amount 5a Pensions and annuities. b Taxable amount 6a Social security benefits b Taxable amount 7 Capital gain or (loss). Attach Schedule D if required. If not required, check here 8 Other income from Schedule 1, line 9. 9 Add lines 1, 2b, 3b, 4b, 5b, 6b, 7, and 8. This is your total income Adjustments to income: a From Schedule 1, line 22 ZIP code Apt. no. 10a b Charitable contributions if you take the standard deduction. See instructions 10b Add lines 10a and 10b. These are your total adjustments to income Subtract line 10c from line 9. This is your adjusted gross income Standard deduction or itemized deductions (from Schedule A) Qualified business income deduction. Attach Form 8995 or Form 8995-A Add lines 12 and 13. Taxable income. Subtract line 14 from line 11. If zero or less, enter -0- For Disclosure, Privacy Act, and Paperwork Reduction Act Notice, see separate instructions. Was born before (3) Relationship to you Foreign postal code your tax or refund. You Your social security number Spouse's social security number 1. F Presidential Election Campaign Check here if you, or your spouse if filing jointly, want $31 to go to this fund. Checking a box below will not change Cat. No. 11320B y 2, 1956 Is blind (4) if qualifies for (see instructions): Child tax credit I A A Spouse No Credit for other dependents E L 1 2b 3b 4b 5b 6b 7 8 9 10c 11 12 13 14 15 Form 1040 (2020)
Step by Step Solution
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