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Review the client's personal information and financial data.
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Prepare the federal tax return using Intuit ProConnect. (Links to an external site.) for the applicable tax year.
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Review the tax return information against the taxpayers' tax statements for accuracy and check for any spelling errors.
44. 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, and Wanda is employed part-time as a paralegal for a law firm. During 2019, the Deans had the following receipts: Salaries ($60,000 for Lance, $41,000 for Wanda) $ 101,000 Interest income- City of Albuquerque general purpose bonds $1,000 Ford Motor company bonds 1,100 Ally Bank certificate of deposit 400 2,500 Child support payments from John Allen 7,200 Annual gifts from parents 26,000 Settlement from Roadrunner Touring Company 90,000 Lottery winnings 600 Federal income tax refund (for tax year 2018) 400 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 termi- nate if Wanda remarried. In July, while going to lunch in downtown Santa Fe, Wanda was injured by a tour bus. Because the driver was clearly at fault, the owner of the bus, Roadrunner Tour- ing 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. $7,200 The Deans had the following expenditures for 2019: Medical expenses (not covered by insurance) Taxes- Property taxes on personal residence $3,600 State of New Mexico income tax (includes amount withheld from wages during 2019) 4,200 Interest on home mortgage (First National Bank) Charitable contributions Life insurance premiums (policy on Lance's life) Contribution to traditional IRA (on Wanda's behalf) Traffic fines Contribution to the reelection campaign fund of the mayor of Santa Fe Funeral expenses for Wayne Boyle 7,800 6,000 3,600 1,200 5,000 300 500 6,300 The life insurance policy was taken out by Lance several years ago and desig- nates Wanda as the beneficiary. As a part-time employee, Wanda is excluded from coverage under her employer's 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: Birth Date Lance Dean (age 42) Wanda Dean (age 40) Penny Allen (age 19) Kyle Allen (age 16) Wayne Boyle (age 75) Social Security Number 123-45-6786 123-45-6787 123-45-6788 123-45-6780 123-45-6785 12/16/1977 08/08/1979 10/09/2000 05/03/2003 06/15/1944 Penny graduated from high school on May 9, 2019, and is undecided about college. During 2019, she earned $8,500 placed in a savings account) playing a harp in the lobby of a local hotel. Wayne is Wanda's widower father who died on December 20, 2019. 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. Determine the Federal income tax for 2019 for the Deans on a joint return by completing the appropriate forms. They do not own and did not use any virtual currency during the year, and they do not want to contribute to the Presidential Election Campaign Fund. If an overpayment results, it is to be refunded to them. Suggested software: ProConnect Tax Online
