Scenario

You have been hired as a junior accountant at a medium-sized tax and accounting firm. Your manager would like to understand your level of knowledge of preparing a basic tax return. She has provided several client profiles for you to review and would like you to complete a tax return. The firm has found it helpful for new tax professionals to choose which clients tax return theyd like to work on in their initial weeks with the company.

Once you select the client you would like to work with from the Client Tax Profile A list found in the Supporting Materials section below, review the clients current year tax package. Refer back to the Tax Organizer you prepared for your selected client in Project One Milestone Two. Determine what information must be used to prepare the clients tax return. Keep in mind some items provided by the client may not be required or applicable for the completion of the tax return you are working on. You may wish to utilize checklists or other guidelines found in the Supporting Materials section to assist you in preparing the clients tax return.

Once the tax return is prepared, you will summarize the outcome of the tax return, including the decisions involved in completing the tax return. For example, you will want to identify how required income sources were determined, what relevant deductions were taken, what applicable credits were applied (if any), whether supplement forms were used, and the tax liability for the current tax year. Youll also want to document the outcome of the return, such as whether the taxpayer(s) will obtain a refund or will incur an amount due for the tax year.

Note: Please be sure you dont add a value to cells on the 1040 form or any additional schedules or worksheets that do not apply. Leave them blank. For example, if on schedule A, there are no charitable contributions but there are real-estate taxes, you would leave the charitable contributions cell blank and add a value in the real-estate taxes cell. Dont forget to input a value for any lines that are included in the total.

Directions

Specifically, you must address the following rubric criteria:

Part One: Completed 1040 Tax Return

1. Apply relevant sources of income to complete a tax return. Include the following:

• What income sources should be reported?

Determine relevant deductions (standard versus itemized) based on taxpayer circumstances. Consider the following:

• Does the taxpayer have enough deductions to itemize or is the standard deduction more beneficial?

Apply relevant tax credits to a tax return based on the taxpayers position to claim tax credits. Consider the following:

• Which credits might be applicable to the taxpayer?
• Are there income limitations for claiming any available tax credits?

Calculate the correct tax liability utilizing the appropriate tax table.

Complete correct supplemental forms to meet the taxpayer's needs.

Part Two: Short Paper

1. Summarize how decisions made have impacted each section of the completed tax return. Include the following in your summary:

• How were required income sources determined?
• What relevant deductions were taken?
• What applicable credits were applied, if any?
• Were supplemental forms used?
• How was the correct tax liability calculated for the current year?
• How was the outcome of the return determined?

What to Submit

To complete this project, you must submit the following:

Completed 1040 Tax Return

• Submit a completed 1040 Tax Return in PDF format.

Tax Client #4 Erika Siegel

Descriptors Data Comments

Client ID 1117

Primary Taxpayers Legal Name Erika Siegel

Primary Taxpayers Preferred Pronoun She

SSN ***-**-1117

Age 42

Occupation Attorney

Citizen/U.S. Resident Status U.S. Citizen

Primary Residence 969 Mulberry Road, Pierre, SD, 57501 Client rents home

Secondary Residence N/A

Business Owner N/A

Property Ownership N/A

Languages English

Marital Status Single

Spouses Legal Name N/A

Spouses Preferred Pronoun N/A

Spouses Age N/A

Spouses Occupation N/A

Dependent(s) (# - Relationship) (Name/Age/SSN) 2 Daughters Jasmine Siegel (Age 20) (***-**-1119)

Kiara Siegel (Age 18) (***-**-1120)

Income Streams W2

Erika is single and has two children with her ex-husband, Larry Siegel, whom she pays alimony to. Erika works as an attorney for a law firm that services the local community. Her daughters, Jasmine and Kiara, live with her in her home full time. Jasmine graduated high school, works full-time as a server, and files her own tax return. Kiara is not working and is still enrolled in high school.

Client 4 Details

Erika provided receipts for repairs to the home she rents for $375 that was not reimbursed by her landlord.

Erika provided receipts for health insurance premiums paid for her children totaling $9,600 for the year and co-pays for doctor visits totaling $5,102 for the year.

Erika provided Form 1098 reporting $13,501 in mortgage interest and $9,608 in real estate taxes for her primary residence.

Erika provided Form 1098-E reporting student loan interest paid of $14,500.

Erika noted paying her ex-husband $36,000 in alimony from a divorce decree settled on March 1, 2014.

Erikas ex-husbands information is as follows. Name: Larry Siegel. SSN: ***-**-1118.

The general sales tax paid was $1,318.

Client 4 W2

Erikas W2 contained information in the following boxes:

Wages (box 1) $196,055

Federal W/H (box 2) $57,200

Social Security Wages (box 3) $142,800

Social Security W/H (box 4) $8,854

Medicare Wages (box 5) $196,055

Medicare W/H (box 6) $2,843