Reba Dixon is a fifth-grade school teacher who earned a salary of $38,000 in 2019. She is 45 years old and has been divorced for four years. She receives $1,200 of alimony payments each month from her former husband (divorced in 2016). Reba also rents out a small apartment building. This year Reba recelved $50,000 of rental payments from tenants and she Incurred $19,500 of expenses associated with the rental. Reba and her daughter Heather (20 years old at the end of the year) moved to Georgia in January of this year. Reba provides more than one-half of Heather's support. They had been living in Colorado for the past 15 years, but ever since her divorce, Reba has been wanting to move back to Georgia to be closer to her family. Luckily, last December, a teaching position opened up and Reba and Heather decided to make the move. Reba pald a moving company $2,010 to move their personal belongings, and she and Heather spent two days driving the 1,426 miles to Georgia. Reba rented a home in Georgia. Heather decided to continue living at home with her mom, but she started attending school full-time in January and throughout the rest of the year at a nearby university. She was awarded a $3,000 partial tuition scholarship this year, and Reba helped out by paying the remaining $500 tultion cost. If possible, Reba thought it would be best to claim the education credit for these expenses. Reba wasn't sure if she would have enough items to help her benefit from itemizing on her tax return. However, she kept track of several expenses this year that she thought might qualify if she was able to itemize. Reba paid $5,800 in state Income taxes and $12,500 in charitable contributions during the year. She also paid the following medical-related expenses for herself and Heather: Insurance premiums Medical care expenses Prescription medicine Nonprescription medicine New contact lenses for Heather $7,952 $1,1ee $ 350 $ 1ee $ 200 Shortly after the move, Reba got distracted while driving and she ran into a street sign. The accident caused $900 in damage to the car and gave her whiplash. Because the repairs were less than her insurance deductible, she paid the entire cost of the repairs. Reba wasn't able to work for two months after the accident. Fortunately, she received $2,000 from her disability Insurance. Her employer, the Central Georgia School District, pald 60 percent of the premiums on the policy as a nontaxable fringe benefit and Reba pald the remaining 40 percent portion. A few years ago, Reba acquired several Investments with her portion of the divorce settlement. This year she reported the following Income from her Investments: $2,200 of Interest Income from corporate bonds and $1,500 Interest Income from City of Denver municipal bonds. Overall, Reba's stock portfolio appreciated by $12,000 but she did not sell any of her stocks. Heather reported $6,200 of Interest Income from corporate bonds she recelved as gifts from her father over the last several years. This was Heather's only source of income for the year. Reba had $10,000 of federal income taxes withheld by her employer. Heather made $1,000 of estimated tax payments during the year. Reba did not make any estimated payments. Reba had qualifying Insurance for purposes of the Affordable Care Act (ACA). (1) (2) Answer is complete and correct. Description Amount Gross Income Salary S 38,000 Alimony received S 14,400 Rental receipts S 50,000 Disability insurance payments s 1,200 Interest income from corporate bonds S 2.200 Interest income from municipal bonds S 0 Gross income S 105,800 Deductions for AGI: Expenses for rental property S 19,500 Total for AGI deductions $ 19,500 AGI S 86,300 From AGI deductions: Medical expenses S 972 State income taxes s 5,800 Charitable contributions S 12,500 Total itemized deductions 19,272 Standard deduction S 18,350 Greater of itemized deductions or standard deduction S 19,272 Taxable income 67,028 Tax on taxable income S 9,184 Credits $ 685 Tax prepayments S 10,000 Tax refund S (1,501) (3) S (4) (5) (6) (7) (8) (9) (10) S 1040 PG 1 1040 PG 2 Schedule 1 Schedule 3 Page 2 of Form 1040. Some information does not carry over from Page 1. 1 Page 2 38,000 2,200 86,300 86,300 19,272 67,028 9.184 Form 1040 (2018) 1 Wages, salaries, tips, etc. Attach Form(s) W-2 Attach Form(s) W-2. 2a Tax-exempt interest b Taxable interest 2b Also attach Form(s) W-2G and 1099-R if 3a Qualified dividends 3a b Ordinary 3b tax was withheld dividends 4a IRAs, pensions, and annuities 4a b Taxable amount 4b 5a 5a Social security benefits Standard deduction b Taxable amount 5b for- 6 Total income. Add lines 1 through 5. Add any amount from Schedule 1. line 22 48100 6 7 Adjusted gross income. If you have no adjustments to income, enter the amount from line 8; otherwise, subtract Schedule 1. - Single or Married line 36, from line 6 7 filing separately $12,000 8 Standard deduction or itemized deductions (from Schedule A) 8 9 Qualified business income deduction (see instructions) 9 10 Taxable income. Subtract lines 8 and 9 from line 7. If zero or less, enter - - 10 - Married filing jointly or Qualifying 11 a Tax (see inst.) 9,184 (check if any from: 1. Form(s) 8814 2. Form 4972 widow(er). $24,000 3. b Add any amount from Schedule 2 and check here 11 12 a Child tax credit credit for other Head of dependents 500 household, $18,000 b Add any amount from Schedule 3 and check here 12 13 Subtract line 12 from line 11. If zero or less, enter-O- 13 14 Other taxes. Attach Schedule 4 14 . If you checked 15 Total tax. Add lines 13 and 14 15 any box under 16 Federal income tax withheld from Forms W-2 and 1099 16 Standard deduction, see instructions. 17 Refundable credits: a EIC (see inst.) b Sch. 8812 c Form 8863 Add any amount from Schedule 5 17 18 Add lines 16 and 17. These are your total payments. 18 Refund 19 If line 18 is more than line 15, subtract line 15 from line 18. This is the amount you overpaid 19 20a Amount of line 19 you want refunded to you. If Form 8888 is attached, check here > Routing Direct deposit? See number c Type: Checking Savings instructions. >d Account number 21 Amount of line 19 you want applied to your 2019 estimated tax 21 Amount You 22 Amount you owe. Subtract line 18 from line 15. For details on how to pay, see instructions 22 Owe 23 Estimated tax penalty (see instructions) 23 Go to www.irs.gov/Form 1040 for instructions and the latest information. THIS FORM IS A SIMULATION OF AN OFFICIAL U.S. TAX FORM. IT IS NOT THE OFFICIAL FORM ITSELF. DO NOT USE THIS FORM FOR TAX FILINGS OR FOR ANY PURPOSE OTHER THAN EDUCATIONAL. 2019 McGraw-Hill Education. 685 8,499 9.184 10,000 10,000 1,501 1,501 20a 816 Form 1040 (2018) Schedule 1 of Form 1040. 2018 10 > SCHEDULE 1 Additional Income and Adjustments to Income OMB No. 1545-0074 (Form 1040) Department of the Treasury Attach to Form 1040 Internal Revenue Service Go to www.irs.gov/Form1040 for instructions and the latest information. Attachment Sequence No. 01 Name(s) shown on Form 1040 Your social security number Reba Dixon 111-11-1111 Additional 1-9 b Reserved 1-9b Income 10 Taxable refunds, credits, or offsets of state and local income taxes 10 11 Alimony received 11 14,400 12 Business income or loss). Attach Schedule C or C-EZ 12 13 Capital gain or loss). Attach Schedule D if required. If not required, check here 13 14 Other gains or losses). Attach Form 4797 14 15a Reserved 15b 16a Reserved 17 Rental real estate, royalties, partnerships. S corporations, trusts, etc. Attach Schedule E 17 30,500 18 Farm income or loss). Attach Schedule F 18 19 Unemployment compensation 19 20a Reserved 20b 21 Other income. List type and amount Disability Insurance Payments 21 1,200 22 Combine the amounts in the far right column. If you don't have any adjustments to income, enter here and include on Form 1040, line 6. Otherwise, go to line 23 22 46,100 Adjustments 23 Educator expenses 23 to Income 24 Certain business expenses of reservists, performing artists. and fee-basis government officials. Attach Form 2106 24 25 Health savings account deduction. Attach Form 8889 25 26 Moving expenses for members of the armed forces. Attach Form 28 3903 27 Deductible part of self-employment tax. Attach Schedule SE 27 28 Self-employed SEP, SIMPLE, and qualified plans 28 29 Self-employed health insurance deduction 29 30 Penalty on early withdrawal of savings 30 31a Alimony paid b Recipient's SSN 31a 32 IRA deduction 32 33 Student loan interest deduction 33 34 Reserved 34 35 Reserved 35 36 Add lines 23 through 35 36 0 For Paperwork Reduction Act Notice, see your tax return instructions. Cat. No. 71479F Schedule 1 (Form 1040) 2018 THIS FORM IS A SIMULATION OF AN OFFICIAL U.S. TAX FORM. IT IS NOT THE OFFICIAL FORM IT SELF. DO NOT USE THIS FORM FOR TAX FILINGS OR FOR ANY PURPOSE OTHER THAN EDUCATIONAL. 2019 McGraw-Hill Education. 1040 for a Head of house hold with one dependent. 1040 PG 1 1040 PG 2 Schedule 1 1 Schedule 3 Schedule 3 of Form 1040. . 2018 SCHEDULE 3 Nonrefundable Credits OMB No. 1545-0074 (Form 1040) Department of the Treasury Attach to Form 1040 Internal Revenue Service Go to www.irs.gov/Form 1040 for instructions and the latest information. Attachment Sequence No. 03 Name(s) shown on Form 1040 Your social security number Reba Dixon 111-11-1111 Nonrefundable 48 Foreign tax credit. Attach Form 1116 if required 48 Credits 49 Credit for child and dependent care expenses. Attach Form 2441 49 50 Education credits from Form 8863, line 19 50 185 X 51 Retirement savings contributions credit. Attach Form 8880 51 52 Reserved 52 53 Residential energy credit. Attach Form 5895 53 54 Other credits from a 3800 Form b 8801 54 55 Add the amounts in the far right column. Enter here and include on Form 1040, line 12 55 185 For Paperwork Reduction Act Notice, see your tax return instructions Cat. No. 71479F Schedule 3 (Form 1040) 2018 THIS FORM IS A SIMULATION OF AN OFFICIAL U.S. TAX FORM. IT IS NOT THE OFFICIAL FORM IT SELF. DO NOT USE THIS FORM FOR TAX FILINGS OR FOR ANY PURPOSE OTHER THAN EDUCATIONAL. 2019 McGraw-Hill Education. Routing Direct deposit? See number c Type: Checking Savings instructions. >d Account number 21 Amount of line 19 you want applied to your 2019 estimated tax 21 Amount You 22 Amount you owe. Subtract line 18 from line 15. For details on how to pay, see instructions 22 Owe 23 Estimated tax penalty (see instructions) 23 Go to www.irs.gov/Form 1040 for instructions and the latest information. THIS FORM IS A SIMULATION OF AN OFFICIAL U.S. TAX FORM. IT IS NOT THE OFFICIAL FORM ITSELF. DO NOT USE THIS FORM FOR TAX FILINGS OR FOR ANY PURPOSE OTHER THAN EDUCATIONAL. 2019 McGraw-Hill Education. 685 8,499 9.184 10,000 10,000 1,501 1,501 20a 816 Form 1040 (2018) Schedule 1 of Form 1040. 2018 10 > SCHEDULE 1 Additional Income and Adjustments to Income OMB No. 1545-0074 (Form 1040) Department of the Treasury Attach to Form 1040 Internal Revenue Service Go to www.irs.gov/Form1040 for instructions and the latest information. Attachment Sequence No. 01 Name(s) shown on Form 1040 Your social security number Reba Dixon 111-11-1111 Additional 1-9 b Reserved 1-9b Income 10 Taxable refunds, credits, or offsets of state and local income taxes 10 11 Alimony received 11 14,400 12 Business income or loss). Attach Schedule C or C-EZ 12 13 Capital gain or loss). Attach Schedule D if required. If not required, check here 13 14 Other gains or losses). Attach Form 4797 14 15a Reserved 15b 16a Reserved 17 Rental real estate, royalties, partnerships. S corporations, trusts, etc. Attach Schedule E 17 30,500 18 Farm income or loss). Attach Schedule F 18 19 Unemployment compensation 19 20a Reserved 20b 21 Other income. List type and amount Disability Insurance Payments 21 1,200 22 Combine the amounts in the far right column. If you don't have any adjustments to income, enter here and include on Form 1040, line 6. Otherwise, go to line 23 22 46,100 Adjustments 23 Educator expenses 23 to Income 24 Certain business expenses of reservists, performing artists. and fee-basis government officials. Attach Form 2106 24 25 Health savings account deduction. Attach Form 8889 25 26 Moving expenses for members of the armed forces. Attach Form 28 3903 27 Deductible part of self-employment tax. Attach Schedule SE 27 28 Self-employed SEP, SIMPLE, and qualified plans 28 29 Self-employed health insurance deduction 29 30 Penalty on early withdrawal of savings 30 31a Alimony paid b Recipient's SSN 31a 32 IRA deduction 32 33 Student loan interest deduction 33 34 Reserved 34 35 Reserved 35 36 Add lines 23 through 35 36 0 For Paperwork Reduction Act Notice, see your tax return instructions. Cat. No. 71479F Schedule 1 (Form 1040) 2018 THIS FORM IS A SIMULATION OF AN OFFICIAL U.S. TAX FORM. IT IS NOT THE OFFICIAL FORM IT SELF. DO NOT USE THIS FORM FOR TAX FILINGS OR FOR ANY PURPOSE OTHER THAN EDUCATIONAL. 2019 McGraw-Hill Education. 1040 for a Head of house hold with one dependent. 1040 PG 1 1040 PG 2 Schedule 1 1 Schedule 3 Schedule 3 of Form 1040. . 2018 SCHEDULE 3 Nonrefundable Credits OMB No. 1545-0074 (Form 1040) Department of the Treasury Attach to Form 1040 Internal Revenue Service Go to www.irs.gov/Form 1040 for instructions and the latest information. Attachment Sequence No. 03 Name(s) shown on Form 1040 Your social security number Reba Dixon 111-11-1111 Nonrefundable 48 Foreign tax credit. Attach Form 1116 if required 48 Credits 49 Credit for child and dependent care expenses. Attach Form 2441 49 50 Education credits from Form 8863, line 19 50 185 X 51 Retirement savings contributions credit. Attach Form 8880 51 52 Reserved 52 53 Residential energy credit. Attach Form 5895 53 54 Other credits from a 3800 Form b 8801 54 55 Add the amounts in the far right column. Enter here and include on Form 1040, line 12 55 185 For Paperwork Reduction Act Notice, see your tax return instructions Cat. No. 71479F Schedule 3 (Form 1040) 2018 THIS FORM IS A SIMULATION OF AN OFFICIAL U.S. TAX FORM. IT IS NOT THE OFFICIAL FORM IT SELF. DO NOT USE THIS FORM FOR TAX FILINGS OR FOR ANY PURPOSE OTHER THAN EDUCATIONAL. 2019 McGraw-Hill Education.