Required: Prepare both the federal and state tax returns for the Schmidt's using the following information. Ralph L. (SSN 365-94-5541, Date of Birth 8/13/1985) and Denise M. Schmidt (SSN 368-65- 3229, Date of Birth 2/24/1983) were married on January 1 of last year. They reside at 1149 Ford Street, Dexter, Michigan 48130. Ralph's daytime (work) telephone number is 734-555-1179, Denise's daytime (work) telephone number is 800-555-5410, and their home/evening telephone number is 734-555-8398. Denise has a son, James J. Nelson (SSN 364-77-7713, Date of Birth 10/04/2013), from her previous marriage. They both want to take advantage of the presidential election campaign check-off. Ralph's occupation is Computer Programmer. Four tax forms are included. Ralph's W2 and three 1099s. In addition, the Schmidt's reported the following financial information pertaining to their activities during the year 2020. a) Ralph earned a $96,000 salary for the year (see W-2). b) Denise received $2,000 in alimony and $4,500 in child support payments from her former husband. They divorced in 2016. c) Denise won a $900 cash prize at her church-sponsored Bingo game. d) The couple bought 50 shares of DEF Inc.. stock for $40 per share on July 2. The stock was worth $47 a share on December 31. The stock paid a dividend of $1.00 per share on December 1 and are considered qualified dividends (See 1099-DIV). e) Denise's father passed away on April 18. She inherited cash of $50,000 and his baseball card collection, valued at $2,000. As the beneficiary of her father's life insurance policy, she also received $150,000. f) The couple spent a weekend in Detroit in November and came home with gambling winnings of $1,200 from Motor City Casino. This was reported on a W2-G. Casino's EIN is 38- 1234567 and address is publicly available. g) Ralph was hit and injured by a drunk driver while crossing a street at a crosswalk. He was unable to work for a month. He received $6,000 from his disability insurance. Gaggle paid the premiums for Ralph but it reported the amount of the premiums as compensation to Ralph on his year-end W-2. h) The drunk driver who hit Ralph in part (g) was required to pay his $2,000 medical costs, $1,500 for the emotional trauma he suffered from the accident, and $5,000 for punitive damages. i) For meeting his performance goals this year, Ralph was informed on December 27 that he would receive a $5,000 year-end bonus. Gaggle (located in Ann Arbor, Michigan) mailed Ralph's bonus check from its payroll processing center (Tampa, Florida) on December 28. Ralph didn't receive the check at his home until January 2. j) Denise is self-employed and runs a day care center. EIN: 38-0003444. Name and address: Munchkin Day Care Center, 47 Main Street, Dexter, MI 48130. Her day care business collected $35,000 in revenues. In addition, customers owed her $3,000 at year-end. During the year, Denise spent $5,500 for supplies, $1,500 for utilities, $15,000 for rent of building, and $500 for miscellaneous expenses. One customer gave her use of his vacation home for a week (worth $2,500) in exchange for Denise allowing his child to attend the day care center free of charge. Denise accounts for her business activities using the cash method of accounting k) Ralph's employer pays the couple's annual health insurance premiums of $5,500 for a qualified plan. 1) Since Denise is self-employed, she made $10,000 total estimated federal tax payments and $1,300 total estimated state tax payments for 2020. Assume she made equal payments for the four quarters (i.e. $2,500 for federal and $325 for state) and estimates were always paid on the due dates. m) If there is a tax refund, taxpayers want the entire refund to be applied to their 2021 estimated tax. n) Check box to apply the American Rescue Plan Provisions. o) Check box Due diligence requirements have been completed (Form 8867) p) Denise wants to defer SE taxes check box to apply the latest Schedule SE and H deferral rules. Denise earns self-employment income evenly through out the year so let the software program allocate self-employment income automatically. q) Your name as Preparer should be print on Form 1040 r) Allow discussion with IRS W-2 2020 Federal Filing Copy Wage and Tax Statement (Example) Copy B to be filed with employee's Federal Income Tax Return 1 Wages, tips, other comp 2 Federal income tax withheld 96,000.00 10,000.00 3 Social security wages 4 Social security tax withheld 101,500.00 6,293.00 5 Medicare wages and tips 6 Medicare tax withheld 101,500.00 1,472.00 d Control number Employer use only c Employer's name, address, and ZIP code Gaggle Corporation 5222 Scio Church Road Ann Arbor, MI 48105 b Employer's FED ID number 38-5885237 7 Social security tips a Employee's SSA number 365-94-5541 8 Allocated tips 9 10 Dependent care benefits 11 Nonqualified plans 12a See instructions for box 12 DD 12b 5,500 14 Other 12c 13 Stat emp 12d Ret. 3rd party sick Plan pay X e/f Employee's name, address, and ZIP code Ralph L. Schmidt 1149 Ford Street Dexter, MI 48130 16 State wages, tips, etc. 15 State MI Employer's state ID no. 38-5885237 96,000.00 17 State income tax 18 Local wages, tips, etc. 3,600.00 19 Local income tax 20 Locality name VOID PAYER'S name, street address, city or town, state or province, CORRECTED la Total ordinary dividends country, and ZIP or foreign postal code 50 OMB No. 1244-5678 DEF Inc. 50 2020 Dividends and Distributions 1b Qualified dividends The Deep Drive Lake City, MI 48130 Form 1099-DIV 2a Total capital gain distr. 2b Unrecap. Sec. 1250 gain Copy 1 PAYER'S federal identification number RECIPIENT'S identification number 2c Section 1202 gain 2d Collectibles (28%) gain For State Tax Department 56-8967456 365-94-5541 3 Nondividend distributions 4 Federal income tax withheld RECIPIENT'S name Ralph L. Schmidt 5 Section 199A Dividends 6 Investment expenses Street address (including apt. no.) 1149 Ford Street 7 Foreign tax paid 8 Foreign country or U.S. possession City or town, state or province, country, and ZIP or foreign postal code O 9 Cash liquidation distributions Dexter, MI 48130 10 Noncash liquidation distributions 11 Exempt-interest dividends FATCA filing Requirement 12 Specified private activity bond interest dividends Account number (see instructions) 2nd TIN not. 13 State 14 state identificatione 15 State tax withheld Form 1099-DIV Department of the Treasury - Internal Revenue Service PAYER'S name, street address, city or town, state or province, Payer's RTN (optional) OMB No. 1234-5678 country, ZIP or foreign postal code, and telephone no. Macrosoft Corporation 599 Willow Street 2020 Interest Income 1 Interest Income Ypsilanti, MI 48197 500 Form 1099-INT 2 Early withdrawal penalty Cor PAYER'S federal identification RECIPIENT'S identification number For State number Depart 3 Interest on U.S. Savings Bonds and Treas. Obligations 38-45512333 365-94-5541 4 Federal income tax withheld 5 Investment expenses RECIPIENT'S name Ralph L. Schmidt Street address (including apt. no.) 1149 Ford Street 6 Foreign tax paid 7 Foreign country or U.S. possession 8 Tax-exempt interest City or town, state or province, country, and ZIP or foreign postal code Dexter, MI 48130 9 specified private activity bond Interest 10 Market discount 11 Bond premium 13 Bond premium on FATCA filing requ[rement 12 Bond premium on Treasury obligations tax-exmpt bond Account number (see instructions) 2nd TIN not. 14 Tax-exempt and tax credit bond 16 State identification no 17 State tax withh_ 15 State CUSIP no. Form 1099-INT Department of the Treasury - Internal Revenue Service CORRECTED VOID PAYER'S name, street address, city or town, state or province, Payer's RTN (optional) 2020 Interest Income Form 1099-INT country, ZIP or foreign postal code, and telephone no. City of Saginaw 1315 S. Washington Ave. Saginaw, MI 48601 1 Interest Income Copy 1 2 Early withdrawal penalty RECIPIENT'S identification number PAYER'S federal identification number For State Tax Department 3 Interest on U.S. Savings Bonds and Treas. Obligations 38-45512444 365-94-5541 RECIPIENT'S name Federal income tax withheld 5 Investment expenses Ralph L. Schmidt 6 Foreign tax paid Foreign country or U.S. possession Street address (including apt. no.) 1149 Ford Street City or town, state or province, country, and ZIP or foreign postal code Dexter, MI 48130 8 Tax-exempt interest 9 specified private activity bond Interest 250 10 Market discount 11 Bond premium 12 Bond premium 13 Bond premium on FATCA filing requirement on Treasury obligations tax-ekmpt bond Account number (see instructions) 14 Tax-exempt and tax credit bond 16 State identification no. 17 State tax withheld 2nd TIN not. 15 State Form 1099-INT Required: Prepare both the federal and state tax returns for the Schmidt's using the following information. Ralph L. (SSN 365-94-5541, Date of Birth 8/13/1985) and Denise M. Schmidt (SSN 368-65- 3229, Date of Birth 2/24/1983) were married on January 1 of last year. They reside at 1149 Ford Street, Dexter, Michigan 48130. Ralph's daytime (work) telephone number is 734-555-1179, Denise's daytime (work) telephone number is 800-555-5410, and their home/evening telephone number is 734-555-8398. Denise has a son, James J. Nelson (SSN 364-77-7713, Date of Birth 10/04/2013), from her previous marriage. They both want to take advantage of the presidential election campaign check-off. Ralph's occupation is Computer Programmer. Four tax forms are included. Ralph's W2 and three 1099s. In addition, the Schmidt's reported the following financial information pertaining to their activities during the year 2020. a) Ralph earned a $96,000 salary for the year (see W-2). b) Denise received $2,000 in alimony and $4,500 in child support payments from her former husband. They divorced in 2016. c) Denise won a $900 cash prize at her church-sponsored Bingo game. d) The couple bought 50 shares of DEF Inc.. stock for $40 per share on July 2. The stock was worth $47 a share on December 31. The stock paid a dividend of $1.00 per share on December 1 and are considered qualified dividends (See 1099-DIV). e) Denise's father passed away on April 18. She inherited cash of $50,000 and his baseball card collection, valued at $2,000. As the beneficiary of her father's life insurance policy, she also received $150,000. f) The couple spent a weekend in Detroit in November and came home with gambling winnings of $1,200 from Motor City Casino. This was reported on a W2-G. Casino's EIN is 38- 1234567 and address is publicly available. g) Ralph was hit and injured by a drunk driver while crossing a street at a crosswalk. He was unable to work for a month. He received $6,000 from his disability insurance. Gaggle paid the premiums for Ralph but it reported the amount of the premiums as compensation to Ralph on his year-end W-2. h) The drunk driver who hit Ralph in part (g) was required to pay his $2,000 medical costs, $1,500 for the emotional trauma he suffered from the accident, and $5,000 for punitive damages. i) For meeting his performance goals this year, Ralph was informed on December 27 that he would receive a $5,000 year-end bonus. Gaggle (located in Ann Arbor, Michigan) mailed Ralph's bonus check from its payroll processing center (Tampa, Florida) on December 28. Ralph didn't receive the check at his home until January 2. j) Denise is self-employed and runs a day care center. EIN: 38-0003444. Name and address: Munchkin Day Care Center, 47 Main Street, Dexter, MI 48130. Her day care business collected $35,000 in revenues. In addition, customers owed her $3,000 at year-end. During the year, Denise spent $5,500 for supplies, $1,500 for utilities, $15,000 for rent of building, and $500 for miscellaneous expenses. One customer gave her use of his vacation home for a week (worth $2,500) in exchange for Denise allowing his child to attend the day care center free of charge. Denise accounts for her business activities using the cash method of accounting k) Ralph's employer pays the couple's annual health insurance premiums of $5,500 for a qualified plan. 1) Since Denise is self-employed, she made $10,000 total estimated federal tax payments and $1,300 total estimated state tax payments for 2020. Assume she made equal payments for the four quarters (i.e. $2,500 for federal and $325 for state) and estimates were always paid on the due dates. m) If there is a tax refund, taxpayers want the entire refund to be applied to their 2021 estimated tax. n) Check box to apply the American Rescue Plan Provisions. o) Check box Due diligence requirements have been completed (Form 8867) p) Denise wants to defer SE taxes check box to apply the latest Schedule SE and H deferral rules. Denise earns self-employment income evenly through out the year so let the software program allocate self-employment income automatically. q) Your name as Preparer should be print on Form 1040 r) Allow discussion with IRS W-2 2020 Federal Filing Copy Wage and Tax Statement (Example) Copy B to be filed with employee's Federal Income Tax Return 1 Wages, tips, other comp 2 Federal income tax withheld 96,000.00 10,000.00 3 Social security wages 4 Social security tax withheld 101,500.00 6,293.00 5 Medicare wages and tips 6 Medicare tax withheld 101,500.00 1,472.00 d Control number Employer use only c Employer's name, address, and ZIP code Gaggle Corporation 5222 Scio Church Road Ann Arbor, MI 48105 b Employer's FED ID number 38-5885237 7 Social security tips a Employee's SSA number 365-94-5541 8 Allocated tips 9 10 Dependent care benefits 11 Nonqualified plans 12a See instructions for box 12 DD 12b 5,500 14 Other 12c 13 Stat emp 12d Ret. 3rd party sick Plan pay X e/f Employee's name, address, and ZIP code Ralph L. Schmidt 1149 Ford Street Dexter, MI 48130 16 State wages, tips, etc. 15 State MI Employer's state ID no. 38-5885237 96,000.00 17 State income tax 18 Local wages, tips, etc. 3,600.00 19 Local income tax 20 Locality name VOID PAYER'S name, street address, city or town, state or province, CORRECTED la Total ordinary dividends country, and ZIP or foreign postal code 50 OMB No. 1244-5678 DEF Inc. 50 2020 Dividends and Distributions 1b Qualified dividends The Deep Drive Lake City, MI 48130 Form 1099-DIV 2a Total capital gain distr. 2b Unrecap. Sec. 1250 gain Copy 1 PAYER'S federal identification number RECIPIENT'S identification number 2c Section 1202 gain 2d Collectibles (28%) gain For State Tax Department 56-8967456 365-94-5541 3 Nondividend distributions 4 Federal income tax withheld RECIPIENT'S name Ralph L. Schmidt 5 Section 199A Dividends 6 Investment expenses Street address (including apt. no.) 1149 Ford Street 7 Foreign tax paid 8 Foreign country or U.S. possession City or town, state or province, country, and ZIP or foreign postal code O 9 Cash liquidation distributions Dexter, MI 48130 10 Noncash liquidation distributions 11 Exempt-interest dividends FATCA filing Requirement 12 Specified private activity bond interest dividends Account number (see instructions) 2nd TIN not. 13 State 14 state identificatione 15 State tax withheld Form 1099-DIV Department of the Treasury - Internal Revenue Service PAYER'S name, street address, city or town, state or province, Payer's RTN (optional) OMB No. 1234-5678 country, ZIP or foreign postal code, and telephone no. Macrosoft Corporation 599 Willow Street 2020 Interest Income 1 Interest Income Ypsilanti, MI 48197 500 Form 1099-INT 2 Early withdrawal penalty Cor PAYER'S federal identification RECIPIENT'S identification number For State number Depart 3 Interest on U.S. Savings Bonds and Treas. Obligations 38-45512333 365-94-5541 4 Federal income tax withheld 5 Investment expenses RECIPIENT'S name Ralph L. Schmidt Street address (including apt. no.) 1149 Ford Street 6 Foreign tax paid 7 Foreign country or U.S. possession 8 Tax-exempt interest City or town, state or province, country, and ZIP or foreign postal code Dexter, MI 48130 9 specified private activity bond Interest 10 Market discount 11 Bond premium 13 Bond premium on FATCA filing requ[rement 12 Bond premium on Treasury obligations tax-exmpt bond Account number (see instructions) 2nd TIN not. 14 Tax-exempt and tax credit bond 16 State identification no 17 State tax withh_ 15 State CUSIP no. Form 1099-INT Department of the Treasury - Internal Revenue Service CORRECTED VOID PAYER'S name, street address, city or town, state or province, Payer's RTN (optional) 2020 Interest Income Form 1099-INT country, ZIP or foreign postal code, and telephone no. City of Saginaw 1315 S. Washington Ave. Saginaw, MI 48601 1 Interest Income Copy 1 2 Early withdrawal penalty RECIPIENT'S identification number PAYER'S federal identification number For State Tax Department 3 Interest on U.S. Savings Bonds and Treas. Obligations 38-45512444 365-94-5541 RECIPIENT'S name Federal income tax withheld 5 Investment expenses Ralph L. Schmidt 6 Foreign tax paid Foreign country or U.S. possession Street address (including apt. no.) 1149 Ford Street City or town, state or province, country, and ZIP or foreign postal code Dexter, MI 48130 8 Tax-exempt interest 9 specified private activity bond Interest 250 10 Market discount 11 Bond premium 12 Bond premium 13 Bond premium on FATCA filing requirement on Treasury obligations tax-ekmpt bond Account number (see instructions) 14 Tax-exempt and tax credit bond 16 State identification no. 17 State tax withheld 2nd TIN not. 15 State Form 1099-INT