Richard McCarthy (born 2/14/64; Social Security number 100-10-9090) and Christine McCarthy (born 6/1/1966; Social security number 101-21-3434) have a 19-year-old son (born 10/2/99 Social Security number 555-55-1212), Jack who is a full-time student at the University of Key West. The McCarthys also have a 12-year-old daughter (Social Security number 444-23-1212) Justine, that lives with them. Richard is the CEO at a national paper company. His 2018 Form W-2 Visit the FS webata at www.in.gowafio Ocal securty number aEmpoyeo rate, file 100-10-9090 OMB No. 1545-0008 b Employar identifcation rumbar EIN 32-5656567 2 Fedaral income tax withhald Wagas, bps, cther companssbon 230.000.00 66,000.00 c Employar's nama, addreas, and P code SOCal cumty wages 4 SOCIE ecurly tax withhols51 128,400.00 6 Modicare wages and tips 230,000.00 7 Social secumty tips 7,960.80 6 Medicaro tax withheld Mufflin-Dunder Paper 302 Lackawanna Ave 3,605.00 Scranton, PA 18503 Alocated tips Vorification code d Control numbar 10 Dapandant care bencfits Suff. 11 Nonqualied plans 12a See instructions for box 12 Emplbyoos frst narme and initial Lact name Richard McCarthy 32 Sleepy Hollow Rd. Clarks Summit, PA 18411 Thire-pary p 13 vat Rcmant 12b 14 Cther 12d f Employco's addross and ZIP code Employor's state ID numbor 20 Locaty nam 15 S 17 State Incorne tax 18 Local wagas, tips, atc. 16 tata wagas, 1pe, etc. 19 Local income ta0 1234834 230,000,00 PA 13,800.00 W-2 Wage and Tax Statement Departmant of the Treazury-Intemal Raanus Sarvico 2018 Form Copy B-To Be Flled With Employee's FEDERAL Tax Retum. This infomation is being furnished to the Internal Revenue Servibe. Christine is an optometrist and operates her own practice (The Eyes of March") in town as a sole proprietor. The shop address is 1030 Morgan Highway, Clarks Summit, PA 18411 and the business code is 621320. Christine keeps her books on the accrual basis and her bookkeeper provided the following information: $270,000 9,000 Gross sales Returns Inventory $24,000 Beginning inventory Purchases 120,000 30,000 Ending inventory Rent 24,000 Insurance 11,000 Professional fees 3,000 Payroll Payroll taxes 37,000 2,800 Utilities 4,000 Office expenses 2,000 Depreciation 5,000 The McCahys have a nanny housekeeper they paid $12,000 during 2018. They did not withhold income or FICA taxes. The McCarthys paid Pennsylvania state unemployment $378 in 2018 tax of Christine received a 2018 Form 1099-INT from the National Bank of Scranton that listed interest income of $23,400. Note that McCarthys reasonably allocate $1,278 to state income tax expense for purposes of the Net Investment Income tax. The McCathys paid the following in 2018: Home mortgage interest $15,600 Property taxes Estimated state income tax payments 5,600 3,000 Estimated Federal income tax payments 11,000 Charitable contributions (all cash) 7,600 Required: Complete the McCarthys' federal tax return for 2018. Use Form 1040, Schedule 1 Schedule 4, Schedule A, Schedule B, Schedule C, Schedule H, Schedule SE, Form 8959, and Form 8960 to complete this tax return. Make realistic assumptions about any missing data and ignore any altenative minimum tax. Do not complete Form 4952, which is used for depreciation Richard McCarthy (born 2/14/64; Social Security number 100-10-9090) and Christine McCarthy (born 6/1/1966; Social security number 101-21-3434) have a 19-year-old son (born 10/2/99 Social Security number 555-55-1212), Jack who is a full-time student at the University of Key West. The McCarthys also have a 12-year-old daughter (Social Security number 444-23-1212) Justine, that lives with them. Richard is the CEO at a national paper company. His 2018 Form W-2 Visit the FS webata at www.in.gowafio Ocal securty number aEmpoyeo rate, file 100-10-9090 OMB No. 1545-0008 b Employar identifcation rumbar EIN 32-5656567 2 Fedaral income tax withhald Wagas, bps, cther companssbon 230.000.00 66,000.00 c Employar's nama, addreas, and P code SOCal cumty wages 4 SOCIE ecurly tax withhols51 128,400.00 6 Modicare wages and tips 230,000.00 7 Social secumty tips 7,960.80 6 Medicaro tax withheld Mufflin-Dunder Paper 302 Lackawanna Ave 3,605.00 Scranton, PA 18503 Alocated tips Vorification code d Control numbar 10 Dapandant care bencfits Suff. 11 Nonqualied plans 12a See instructions for box 12 Emplbyoos frst narme and initial Lact name Richard McCarthy 32 Sleepy Hollow Rd. Clarks Summit, PA 18411 Thire-pary p 13 vat Rcmant 12b 14 Cther 12d f Employco's addross and ZIP code Employor's state ID numbor 20 Locaty nam 15 S 17 State Incorne tax 18 Local wagas, tips, atc. 16 tata wagas, 1pe, etc. 19 Local income ta0 1234834 230,000,00 PA 13,800.00 W-2 Wage and Tax Statement Departmant of the Treazury-Intemal Raanus Sarvico 2018 Form Copy B-To Be Flled With Employee's FEDERAL Tax Retum. This infomation is being furnished to the Internal Revenue Servibe. Christine is an optometrist and operates her own practice (The Eyes of March") in town as a sole proprietor. The shop address is 1030 Morgan Highway, Clarks Summit, PA 18411 and the business code is 621320. Christine keeps her books on the accrual basis and her bookkeeper provided the following information: $270,000 9,000 Gross sales Returns Inventory $24,000 Beginning inventory Purchases 120,000 30,000 Ending inventory Rent 24,000 Insurance 11,000 Professional fees 3,000 Payroll Payroll taxes 37,000 2,800 Utilities 4,000 Office expenses 2,000 Depreciation 5,000 The McCahys have a nanny housekeeper they paid $12,000 during 2018. They did not withhold income or FICA taxes. The McCarthys paid Pennsylvania state unemployment $378 in 2018 tax of Christine received a 2018 Form 1099-INT from the National Bank of Scranton that listed interest income of $23,400. Note that McCarthys reasonably allocate $1,278 to state income tax expense for purposes of the Net Investment Income tax. The McCathys paid the following in 2018: Home mortgage interest $15,600 Property taxes Estimated state income tax payments 5,600 3,000 Estimated Federal income tax payments 11,000 Charitable contributions (all cash) 7,600 Required: Complete the McCarthys' federal tax return for 2018. Use Form 1040, Schedule 1 Schedule 4, Schedule A, Schedule B, Schedule C, Schedule H, Schedule SE, Form 8959, and Form 8960 to complete this tax return. Make realistic assumptions about any missing data and ignore any altenative minimum tax. Do not complete Form 4952, which is used for depreciation