Required: Complete the questions below for a 1040 for the following taxpayers for 2018. Make assumptions regarding any information not given.

Taxpayer Name: Jack P. Jensen Spouse: Jill E. Jensen

Taxpayer DOB: May 17, 1975 September 3, 1977

Occupation: Lawn Care Specialist Administrative Assistant

Address:

Jack and Jill are married and wish to file a joint return. They are not blind or disabled. No one may claim them as dependents. Neither is a student. They are U.S. citizens and they had health insurance the entire year provided by Jacks employer.

Jack and Jill have two Forms W-2. Jill received $230 for serving on a jury. Jill also paid $195 in student loan interest to Sallie Mae. Jack enjoys playing the slots but almost never wins. In the current year, however, he hit a penny jackpot worth $150 at the local Indian casino. (Assume up to $150 of gambling losses)

Jack and Jill have one child, a daughter: Nikki Jensen, DOB: 10/10/2005. Nikki lived with her parents all year long and does not have any income. She is not disabled and is not married. She is a U.S. citizen.

The Jensens would like to itemize their deductions using the following information:

2017 State Balance Due $ 261 Paid on March 11, 2018

Real Estate Taxes 3,325

Doctor and Dentist Fees 3,485

Prescription Medications 1,200

Glasses 425

Medical Mileage 960 miles

Jills W-2:

Wages: 24,291

Fed w/h 2,516

Social security 1,020

Medicare 352

State w/h 729

Jacks W-2

Wages: 85,000

Fed w/h 8,500

Social security 5,483

Medicare 1,020

State w/h 4,200

Jack and Jill have the following stock transactions in 2018:

Pepsi Purchased 6/1/08 25,000 Sold 7/5/18 32,000

Coke Purchased 3/1/18 10,000 Sold 10/1/18 7,000

Home Depot Purchased 2/9/18 7,000 Sold 9/2/18 15,000

Lowes Purchased 5/5/15 20,000 Sold 3/7/18 7,000

The Jensens have the following documents:

1. 1099-INT (Interest income) from Bank of America

Box 1 $248.39

2. 1098- INT (Interest paid) from Wells Fargo

Box 1 $4,783.23 for first mortgage

3. 1098-INT (Interest paid) from Bank of America

Box 1 $2,839.52 for second mortgage

Compute the following:

Total includable gross income:

Adjustments for AGI:

AGI:

Itemized Deductions:

Which should they choose (itemized or standard):

Taxable income:

Tax:

Credits:

Tax Due/Refund: