Question
Shauna Coleman is single. She works as an architectural designer for Streamline Design (SD).For 2019, she correctly calculated her AGI to be $107,000. However, she
Shauna Coleman is single. She works as an architectural designer for Streamline Design (SD).For 2019, she correctly calculated her AGI to be $107,000. However, she wasnt sure how to compute the rest of her taxable income. She provided the following information with hopes that you could use it to determine her 2019 federal income tax return.
a. Shauna paid $4,680 for medical expenses for care from a broken ankle sustained in a biking accident. Blake, Shaunas boyfriend, drove Shauna (in her car) a total of 115 miles so that she could receive care for the broken ankle.
b. Shauna paid a total of $3,400 in health insurance premiums during the year (not through an exchange). SD did not reimburse any of this expense. Besides the health insurance premiums and the medical expenses for her broken ankle, Shauna had Lasik eye surgery last year and she paid $3,000 for the surgery (she received no insurance reimbursement). She also incurred $450 of other medical expenses for the year.
c. SD withheld $1,800 of state income tax, $7,495 of Social Security tax, and $14,500 of federal income tax from Shaunas paychecks throughout the year.
d. In 2019, Shauna was due a refund of $250 for overpaying her 2018 state taxes. On her 2018 state tax return that she filed in April of 2019, she applied the overpayment towards her 2019 state tax liability. She wasnt sure but she estimated that her state tax liability for 2019 will be $2,300.
e. Shauna paid $3,200 of property taxes on her personal residence. She also paid $500 to the developer of her subdivision, because he had to replace the sidewalk in certain areas of the subdivision.
f. Shauna paid a $200 property tax based on the states estimate of the value of her car.
g. Shauna has a home mortgage loan in the amount of $220,000 that she secured when she purchased the home. The home is worth about $400,000. Shauna paid interest of $12,300 in interest on the loan this year.
h. Shauna made several charitable contributions throughout the year. She contributed stock in ZYX Corp. to the Red Cross. On the date of the contribution, the FMV of the donated shares was $1,000 and her basis in the shares was $400. Shauna originally bought the ZYX Corp. stock in 2008. Shauna also contributed $300 cash to State University and religious artifacts she has held for several years to her church. The artifacts were valued at $500 and Shaunas basis in the items was $300. Shauna had every reason to believe the church would keep them on display indefinitely. Shauna also drove 200 miles doing church-related errands for her minister. Finally, Shauna contributed $1,200 of service to her church last year.
i Shauna paid $250 in investment advisory fees and another $150 to have her tax return prepared (that is, she paid $150 in 2019 to have her 2018 tax return prepared).
j. Shauna is involved in horse racing as a hobby. During the year, she won $2,500 in prize money (which she is including in income) and incurred $10,000 in expenses. She has never had a profitable year with her horse racing activities, so she acknowledges that this is a hobby for federal income tax purposes.
k. Shauna sustained $2,000 in gambling losses over the year (mostly horse-racing bets) and only had $200 in winnings (which she is including in income)
Required: Determine Shaunas 2019 taxable income starting with Adjusted Gross Income of $107,000 reported on line 7 of Form 1040 and complete page 2 of Form 1040 through Taxable Income, line 10.
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