Reba Dixon is a fifth-grade school teacher who earned a salary of $38,000 in 2020. 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 on 12/31/2016). Reba also rents out a small apartment building. This year Reba received $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 paid 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 tuition 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 $1,100 $ 350 $ 100 $ 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, paid 60 percent of the premiums on the policy as a nontaxable fringe benefit and Reba paid 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 received 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). a. Determine Reba's federal income taxes due or taxes payable for the current year. Use Tax Rate Schedule for reference. (Do not round intermediate values. Round your final answers to the nearest whole dollar amount. Leave no answer blank. Enter zero if applicable.) Amount $ $ $ Description Gross Income: Salary Alimony received Rental receipts Disability insurance payments Interest income from corporate bonds Interest income from municipal bonds Gross income Deductions for AGI: Expenses for rental property Total for AGI deductions AGI 38,000 14,400 50,000 1,200 2,200 $ $ $ 0 (1) $ 105,800 $ 19,500 (2) $ 19,500 86,300 (3) $ $ $ 972 X 5,800 12,500 $ From AGI deductions: Medical expenses State income taxes Charitable contributions Total itemized deductions Standard deduction Greater of itemized deductions or standard deduction Taxable income (4) $ (5) $ (6) $ 19,272 X 18,000 X 19,272 x 67,028 x 9,094 X 685 (7) $ (8) Tax on taxable income $ Credits $ (9) (10) Tax prepayments Tax refund $ $ 10,000 1,501 x Apt. no. Presidential Election Campaign Home address (number and street). If you have a P.O. box, see instructions. 19010 N.W. 135th Street Check here if you, or your spouse if filing jointly, want $3 to go to this fund. Checking a box below will not change your tax or refund. City, town or post office, state, and ZIP code. If you have a foreign address, also complete spaces below (see instructions). Miami, FL 33054. You Spouse If more than four dependents, soe instructions Foreign country name Foreign province/state/county Foreign postal code and here Someone can Standard claim: You as a dependent UYour spouse as a dependent Deduction Spouse itemizes on a separate return or you were a dual-status alien Age/Blindness You: Were bom before January 2, 1955 Are blind Spouse: Was born before January 2, 1955 Is blind Dependents (see instructions): (2) Social security number (3) Relationship to you (4) if qualifies for (see instructions): (1) First name Last name (Enter as xxx-xx-xxxx) Child tax credit Credit for other dependents Heather Dixon 222-22-2222 Daughter N x 1 1 Wages, salaries, tips, etc. Attach Form(s) W-2 105,800 X b Taxable interest. Attach Sch. Bif 2a Tax-exempt interest 2a 2b required 3a Qualified dividends 2,200 b Ordinary dividends. Attach Sch. 3a 3b B if required Standard 4a IRA distributions 4a b Taxable amount 4b Deduction for c Pensions and annuities 40 d Taxable amount 4d - Single or Married 5a Social security benefits 5a b Taxable amount 5b filing separately. $12,200 6 Capital gain or loss). Attach Schedule D if required. If not required, check here 6 - Married filing jointly or 7a Other income from Schedule 1, line 9 7a Qualifying 7b b Add lines 1, 2b, 3b, 4b, 40, 5b, 6, and 7a. This is your total income widow(er), 105,800 $24,400 - Head of Ba Adjustments to income from Schedule 1, line 22 8a household $18,350 b Subtract line Ba from line 7b. This is your adjusted gross income 8b 105,800 . If you checked 9 Standard deduction or itemized deductions (from Schedule A) 9 any box under Standard Deduction 10 Qualified business income deduction. Attach Form 8995 or Form 8995-A 10 see instructions. 11a Add linos 9 and 10 11a 19,272 Taxable income. Subtract line 11a from line Bb. If zero or less, enter-O- 11b 86,528 Cat. No. For Disclosure, Privacy Act, and Paperwork Reduction Act Notice, see separate instructions. Form 1040 (2019) 11320B 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, 2020 McGraw-Hill Education. 19.272 X Page 2 of Form 1040. Some information does not carry over from Page 1. Form 1040 (2019) Page 2 12b x 13b 14 15 16 X x 17 . If you have a qualifying child attach Sch. EIC. . If you have nontaxable combat pay, see instructions 12a Tax (see inst.) Check if any from Form(s): (1)8814 (2) 4972 (3) 12a b Add Schedule 2, line 3. and line 12a and enter the total 13a Child tax credit or credit for other dependents 13a b Add Schedule 3, line 7, and line 13a and enter the total , 14 Subtract line 13b from line 12b. If zero or less, enter-O- 15 Other taxes, including self-employment tax, from Schedule 2, line 10 16 Add lines 14 and 15. This is your total tax 17 Federal income tax withheld from Forms W-2 and 1099 18 Other payments and refundable credits: a Earned income credit (EIC) 18a b Additional child tax credit. Attach Schedule 8812 18b c American opportunity credit from Form 8863, line 8 18c d Schedule 3, line 14 18d e Add lines 18a through 18d. These are your total other payments and refundable credits 19 Add lines 17 and 18e. These are your total payments 20 if line 19 is more than line 16, subtract line 16 from line 19. This is the amount you overpaid 21a Amount of line 20 you want refunded to you. If Form 8888 is attached, check here > Routing number c Type: : Checking Savings d Account number 22 Amount of line 20 you want applied to your 2020 estimated 22 tax 23 Amount you owe. Subtract line 19 from line 16. For details on how to pay, see instructions 24 Estimated tax penalty (see instructions) 24 Do you want to allow another person (other than your paid preparer) to discuss this return with the IRS? See instructions. 500 x 18e 500 19 500 20 1,501 Refund 21a Direct deposit? See instructions 1 23 Yes. Complete below No Amount You Owe Third Party Designee (Other than paid preparer) Sign Here Personal identification Designee's name Phone no. number (PIN) Joint return? See instructions. Keep a copy for your records. Under penalties of perjury, I declare that I have examined this return and accompanying schedules and statements, and to the best of my knowledge and belief, they are true, correct, and complete. Declaration of preparer (other than taxpayer) is based on all information of which preparer has any knowledge. If the IRS sent you an Identity Your signature Date Your occupation Protection PIN, enter it here (see inst.) If the IRS sent your spouse an Spouse's signature. If a joint return, both must sign. Date Spouse's occupation Identity Protection PIN, enter it here (see inst.) Attachment Sequence No. Reba Your social security number (Enter as XXX-XX-XXXX) 111-11-1111 Yes No Internal Revenue Service Go to www.irs.gov/Form 1040 for instructions and the latest information. Name(s) shown on Form 1040 or 1040-SR Dixon At any time during 2019, did you receive, sell, send, exchange, or otherwise acquire any financial interest in anyvirtual currency? Part Additional Income 1 Taxable refunds, credits, or offsets of state and local income taxes 2a Alimony received b Date of original divorce or separation agreement (see instructions) 12/31/2016 3 Business income or loss). Attach Schedule C 1 2a 14,400 3 4 Other gains or losses). Attach Form 4797 4 5 5 5 6 6 Rental real estate, royalties, partnerships, S corporations, trusts, etc. Attach Schedule E Farm income or (loss). Attach Schedule F Unemployment compensation Other income. List type and amount Disability Insurance Payments 7 7 8 8 2,000 X 9 9 9 16,400 Part II Combine lines 1 through 8. Enter here and on Form 1040 or 1040-SR, line 7a Adjustments to Income Educator expenses 10 10 11 Certain business expenses of reservists, performing artists, and fee-basis government officials. Attach Form 2106 11 12 12 Health savings account deduction. Attach Form 8889 Moving expenses for members of the Armed Forces. Attach Form 3903 13 13 14 14 15 15 16 16 17 17 18a 18a Deductible part of self-employment tax. Attach Schedule SE Self-employed SEP, SIMPLE, and qualified plans Self-employed health insurance deduction Penalty on early withdrawal of savings Alimony paid Recipient's SSN Date of original divorce or separation agreement (see instructions) IRA deduction Student loan interest deduction Reserved for future use b 19 19 20 20 21 21 22 Add lines 10 through 21. These are your adjustments to income. Enter here and on Form 1040 or 1040-SR, line 8a 22 0 For Paperwork Reduction Act Notice, see your tax return instructions. Cat No. 71479F Schedule 1 (Form 1040 or 1040-SR) 2019 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 ------------------------------ --- Required: b. Is Reba allowed to file as a head of household or single? c. Determine the amount of FICA taxes Reba was required to pay on her salary. d. Determine Heather's federal income taxes due or payable. Use Tax Rate Schedule, Dividends and Capital Gains Tax Rates, Estates and Trusts for reference. b. Head of household Status of taxpayer FICA taxes C. $ 2,907 294 X d. Tax refund Reba Dixon is a fifth-grade school teacher who earned a salary of $38,000 in 2020. 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 on 12/31/2016). Reba also rents out a small apartment building. This year Reba received $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 paid 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 tuition 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 $1,100 $ 350 $ 100 $ 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, paid 60 percent of the premiums on the policy as a nontaxable fringe benefit and Reba paid 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 received 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). a. Determine Reba's federal income taxes due or taxes payable for the current year. Use Tax Rate Schedule for reference. (Do not round intermediate values. Round your final answers to the nearest whole dollar amount. Leave no answer blank. Enter zero if applicable.) Amount $ $ $ Description Gross Income: Salary Alimony received Rental receipts Disability insurance payments Interest income from corporate bonds Interest income from municipal bonds Gross income Deductions for AGI: Expenses for rental property Total for AGI deductions AGI 38,000 14,400 50,000 1,200 2,200 $ $ $ 0 (1) $ 105,800 $ 19,500 (2) $ 19,500 86,300 (3) $ $ $ 972 X 5,800 12,500 $ From AGI deductions: Medical expenses State income taxes Charitable contributions Total itemized deductions Standard deduction Greater of itemized deductions or standard deduction Taxable income (4) $ (5) $ (6) $ 19,272 X 18,000 X 19,272 x 67,028 x 9,094 X 685 (7) $ (8) Tax on taxable income $ Credits $ (9) (10) Tax prepayments Tax refund $ $ 10,000 1,501 x Apt. no. Presidential Election Campaign Home address (number and street). If you have a P.O. box, see instructions. 19010 N.W. 135th Street Check here if you, or your spouse if filing jointly, want $3 to go to this fund. Checking a box below will not change your tax or refund. City, town or post office, state, and ZIP code. If you have a foreign address, also complete spaces below (see instructions). Miami, FL 33054. You Spouse If more than four dependents, soe instructions Foreign country name Foreign province/state/county Foreign postal code and here Someone can Standard claim: You as a dependent UYour spouse as a dependent Deduction Spouse itemizes on a separate return or you were a dual-status alien Age/Blindness You: Were bom before January 2, 1955 Are blind Spouse: Was born before January 2, 1955 Is blind Dependents (see instructions): (2) Social security number (3) Relationship to you (4) if qualifies for (see instructions): (1) First name Last name (Enter as xxx-xx-xxxx) Child tax credit Credit for other dependents Heather Dixon 222-22-2222 Daughter N x 1 1 Wages, salaries, tips, etc. Attach Form(s) W-2 105,800 X b Taxable interest. Attach Sch. Bif 2a Tax-exempt interest 2a 2b required 3a Qualified dividends 2,200 b Ordinary dividends. Attach Sch. 3a 3b B if required Standard 4a IRA distributions 4a b Taxable amount 4b Deduction for c Pensions and annuities 40 d Taxable amount 4d - Single or Married 5a Social security benefits 5a b Taxable amount 5b filing separately. $12,200 6 Capital gain or loss). Attach Schedule D if required. If not required, check here 6 - Married filing jointly or 7a Other income from Schedule 1, line 9 7a Qualifying 7b b Add lines 1, 2b, 3b, 4b, 40, 5b, 6, and 7a. This is your total income widow(er), 105,800 $24,400 - Head of Ba Adjustments to income from Schedule 1, line 22 8a household $18,350 b Subtract line Ba from line 7b. This is your adjusted gross income 8b 105,800 . If you checked 9 Standard deduction or itemized deductions (from Schedule A) 9 any box under Standard Deduction 10 Qualified business income deduction. Attach Form 8995 or Form 8995-A 10 see instructions. 11a Add linos 9 and 10 11a 19,272 Taxable income. Subtract line 11a from line Bb. If zero or less, enter-O- 11b 86,528 Cat. No. For Disclosure, Privacy Act, and Paperwork Reduction Act Notice, see separate instructions. Form 1040 (2019) 11320B 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, 2020 McGraw-Hill Education. 19.272 X Page 2 of Form 1040. Some information does not carry over from Page 1. Form 1040 (2019) Page 2 12b x 13b 14 15 16 X x 17 . If you have a qualifying child attach Sch. EIC. . If you have nontaxable combat pay, see instructions 12a Tax (see inst.) Check if any from Form(s): (1)8814 (2) 4972 (3) 12a b Add Schedule 2, line 3. and line 12a and enter the total 13a Child tax credit or credit for other dependents 13a b Add Schedule 3, line 7, and line 13a and enter the total , 14 Subtract line 13b from line 12b. If zero or less, enter-O- 15 Other taxes, including self-employment tax, from Schedule 2, line 10 16 Add lines 14 and 15. This is your total tax 17 Federal income tax withheld from Forms W-2 and 1099 18 Other payments and refundable credits: a Earned income credit (EIC) 18a b Additional child tax credit. Attach Schedule 8812 18b c American opportunity credit from Form 8863, line 8 18c d Schedule 3, line 14 18d e Add lines 18a through 18d. These are your total other payments and refundable credits 19 Add lines 17 and 18e. These are your total payments 20 if line 19 is more than line 16, subtract line 16 from line 19. This is the amount you overpaid 21a Amount of line 20 you want refunded to you. If Form 8888 is attached, check here > Routing number c Type: : Checking Savings d Account number 22 Amount of line 20 you want applied to your 2020 estimated 22 tax 23 Amount you owe. Subtract line 19 from line 16. For details on how to pay, see instructions 24 Estimated tax penalty (see instructions) 24 Do you want to allow another person (other than your paid preparer) to discuss this return with the IRS? See instructions. 500 x 18e 500 19 500 20 1,501 Refund 21a Direct deposit? See instructions 1 23 Yes. Complete below No Amount You Owe Third Party Designee (Other than paid preparer) Sign Here Personal identification Designee's name Phone no. number (PIN) Joint return? See instructions. Keep a copy for your records. Under penalties of perjury, I declare that I have examined this return and accompanying schedules and statements, and to the best of my knowledge and belief, they are true, correct, and complete. Declaration of preparer (other than taxpayer) is based on all information of which preparer has any knowledge. If the IRS sent you an Identity Your signature Date Your occupation Protection PIN, enter it here (see inst.) If the IRS sent your spouse an Spouse's signature. If a joint return, both must sign. Date Spouse's occupation Identity Protection PIN, enter it here (see inst.) Attachment Sequence No. Reba Your social security number (Enter as XXX-XX-XXXX) 111-11-1111 Yes No Internal Revenue Service Go to www.irs.gov/Form 1040 for instructions and the latest information. Name(s) shown on Form 1040 or 1040-SR Dixon At any time during 2019, did you receive, sell, send, exchange, or otherwise acquire any financial interest in anyvirtual currency? Part Additional Income 1 Taxable refunds, credits, or offsets of state and local income taxes 2a Alimony received b Date of original divorce or separation agreement (see instructions) 12/31/2016 3 Business income or loss). Attach Schedule C 1 2a 14,400 3 4 Other gains or losses). Attach Form 4797 4 5 5 5 6 6 Rental real estate, royalties, partnerships, S corporations, trusts, etc. Attach Schedule E Farm income or (loss). Attach Schedule F Unemployment compensation Other income. List type and amount Disability Insurance Payments 7 7 8 8 2,000 X 9 9 9 16,400 Part II Combine lines 1 through 8. Enter here and on Form 1040 or 1040-SR, line 7a Adjustments to Income Educator expenses 10 10 11 Certain business expenses of reservists, performing artists, and fee-basis government officials. Attach Form 2106 11 12 12 Health savings account deduction. Attach Form 8889 Moving expenses for members of the Armed Forces. Attach Form 3903 13 13 14 14 15 15 16 16 17 17 18a 18a Deductible part of self-employment tax. Attach Schedule SE Self-employed SEP, SIMPLE, and qualified plans Self-employed health insurance deduction Penalty on early withdrawal of savings Alimony paid Recipient's SSN Date of original divorce or separation agreement (see instructions) IRA deduction Student loan interest deduction Reserved for future use b 19 19 20 20 21 21 22 Add lines 10 through 21. These are your adjustments to income. Enter here and on Form 1040 or 1040-SR, line 8a 22 0 For Paperwork Reduction Act Notice, see your tax return instructions. Cat No. 71479F Schedule 1 (Form 1040 or 1040-SR) 2019 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 ------------------------------ --- Required: b. Is Reba allowed to file as a head of household or single? c. Determine the amount of FICA taxes Reba was required to pay on her salary. d. Determine Heather's federal income taxes due or payable. Use Tax Rate Schedule, Dividends and Capital Gains Tax Rates, Estates and Trusts for reference. b. Head of household Status of taxpayer FICA taxes C. $ 2,907 294 X d. Tax refund