Requirements:

• You will file 2022 Federal income tax return (treat all info as for year 2022 not year 2021).
• file Form 1040 and Sch. 1 (do not need Schedule A because they use standard deduction)
• Check Figures: AGI is $98100; taxable income $72200; Calculated tax: 8253; child and/or dependent credit is $3000; a tax refund of $447.
  • It is fine If you have a few dollars difference due to rounding.

Tax Forms Problem

Lance H. and Wanda B. Dean are married and live at 431 Yucca Drive, Santa Fe, NM 87501. Lance works for the convention bureau of the local Chamber of Commerce, while Wanda is employed part-time as a paralegal for a law firm.

During 2021, the Deans had the following receipts:

Details Wanda was previously married to John Allen. When they divorced several years ago, Wanda was awarded custody of their two children, Penny and Kyle. (Note: Wanda has never issued a Form 8332 waiver.) Under the divorce decree, John was obligated to pay alimony and child supportthe alimony payments were to terminate if Wanda remarried.

In July, while going to lunch in downtown Santa Fe, Wanda was injured by a tour bus. As the driver was clearly at fault, the owner of the bus, Roadrunner Touring Company, paid her medical expenses (including a one-week stay in a hospital). To avoid a lawsuit, Roadrunner also transferred $90,000 to her in settlement of the personal injuries she sustained.

The Deans had the following expenditures for 2021:

Details The life insurance policy was taken out by Lance several years ago and designates Wanda as the beneficiary. As a part-time employee, Wanda is excluded from coverage under her employers pension plan. Consequently, she provides for her own retirement with a traditional IRA obtained at a local trust company. Because the mayor is a member of the local Chamber of Commerce, Lance felt compelled to make the political contribution.

The Deans household includes the following, for whom they provide more than half of the support:

Social Security Number Birth Date Lance Dean (age 42) 123-45-6786 12/16/1979 Wanda Dean (age 40) 123-45-6787 08/08/1981 Penny Allen (age 19) 123-45-6788 10/09/2002 Kyle Allen (age 16) 123-45-6789 05/03/2005 Wayne Boyle (age 75) 123-45-6785 06/15/1946 Penny graduated from high school on May 9, 2021, and is undecided about college. During 2021, she earned $8,500 (placed in a savings account) playing a harp in the lobby of a local hotel. Wayne is Wandas widower father, who died on January 20, 2021. For the past few years, Wayne qualified as a dependent of the Deans.

Federal income tax withheld is $3,900 (Lance) and $1,800 (Wanda). The proper amount of Social Security and Medicare tax was withheld. The Deans received the appropriate coronavirus recovery rebates (economic impact payments); related questions in ProConnect Tax should be ignored.