Question
Required: Use the following information to complete Rhonda Hills 2021 federal income tax return. If any information is missing, use reasonable assumptions to fill in
Required: Use the following information to complete Rhonda Hills 2021 federal income tax return. If any information is missing, use reasonable assumptions to fill in the gaps. Assume only Form 1040 is required (i.e., ignore references to other schedules and forms). Assume any credits are nonrefundable.
Facts: 1. Rhonda Hill (unmarried) is employed as an office manager at the main office of Carter and Associates CPA firm. Rhonda lives in a home she purchased 20 years ago. Rhondas older cousin Mabel Wright lives with Rhonda in the home and has lived with her for many years. Mabel is retired and receives $2,400 of tax-exempt Social Security payments and $2,000 of State of Oklahoma bond interest each year. Mabel is able to save this money because Rhonda provides all of Mabels support. In the blank area under the front side of Form 1040, explain how you determined whether or not Mabel is Rhondas dependent (i.e., go through the tests) and how you determined Rhondas filing status.
2. Rhonda also provided the following information:
Rhonda does not want to contribute to the presidential election campaign.
Rhonda lives at 1234 Blue Ridge Way, Tulsa, Oklahoma 74101.
Rhondas birthday is 12/18/1956 and her Social Security number is 335-67-8910.
Mabels birthday is 11/2/1947 and her Social Security number is 566-77-8899.
Rhonda does not want anyone else to discuss her return with the IRS.
Rhonda did not buy, sell, exchange, or otherwise acquire any financial interest in a virtual currency.
3. Rhonda received a Form W-2 from Carter and Associates (her employer) that contained the following relevant information:
Line 1 Wages, tips, other compensation $72,000
Line 2 Federal income tax withheld 7,800
Line 17 State income tax withheld 2,700
4. Rhonda received $250 in interest from City of Tulsa bonds, $120 interest from IBM bonds, and $15 interest from her savings account at the credit union. She also received a $460 dividend from Huggies Company and $500 from Bicker Corporation. Both dividends are qualified dividends. [Hint: Qualified dividends are reported both in ordinary dividends and separately stated as qualified dividends. Ordinary dividends are only reported in ordinary dividends.]
5. Rhonda sold 200 shares of DM stock for $18 a share on June 15, 2021. She purchased the stock on December 12, 2013, for $10 a share. She also sold 50 shares of RSA stock for $15 a share on October 2, 2021. She purchased the stock for $65 a share on February 2, 2021. For purposes of this assignment, assume Schedule D is not required.
6. Rhonda contributed $687 cash to the Red Cross during the year. The Red Cross is a qualified charitable organization.
7. Other than the $2,700 of state income tax withheld from her paycheck and the $687 cash charitable contribution, Rhonda had no other expenses that would qualify as itemized deductions for the current year.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started