Tax question

Note: This problem is for the 2018 tax year. Alfred E. Old and Beulah A. Crane, each age 42, married on September 7, 2016. Alfred and Beulah will file a joint return for 2018. Alfred's Social Security number is 111-11-1109. Beulah's Social Security number is 123-45-6780, and she adopted "old" as her married name. They live at 211 Brickstone Drive, Atlanta, GA 30304. Alfred was divorced from Sarah Old in March 2016. Under the divorce agreement, Alfred is to pay Sarah $1,250 per month for the next 10 years or until Sarah's death, whichever occurs first. Alfred pays Sarah $15,000 in 2018. In addition, in January 2018, Alfred pays Sarah $50,000, which is designated as being for her share of the marital property. Also, Alfred is responsible for all prior years' income taxes. Sarah's Social Security number is 123-45-6788. Alfred's salary for 2018 is $150,000. He is an executive working for Cherry, Inc. (Federal I.D. No. 98-7654321). As part of his compensation package, Cherry provides him with group term life insurance equal to twice his annual salary. His employer withheld $24,900 for Federal income taxes and $8,000 for state income taxes. The proper amounts were withheld for FICA taxes. Beulah recently graduated from law school and is employed by Legal Aid Society, Inc. (Federal I.D. No. 11-1111111), as a public defender. She receives a salary of $42,000 in 2018. Her employer withheld $7,500 for Federal income taxes and $2,400 for state income taxes. The proper amounts were withheld for FICA taxes. Alfred and Beulah had interest income of $500. Alfred and Beulah receive a $1,900 refund on their 2017 state income taxes. They itemized deductions on their 2017 Federal income tax return (total of $15,000). Alfred and Beulah pay $4,500 interest and $1,450 property taxes on their personal residence in 2018. Their charitable contributions total $2,400 (all to their church). They paid sales taxes of $1,400, for which they maintain the receipts. Both spouses had health insurance for all months of 2018 and do not want to contribute to the Presidential Election Campaign. Preparer Use Only BAA For Disclosure, Privacy Act, and Paperwork Maduction Act Notke, des par Form 1040 (2018) Alfred and Beulah A. Old Wages, salaries, tips, Attach Forms) Taxable interest Ordinary dividends TRAS, pensions, and Attach Forms) W- 2. Also attach Forms) W-26 and 1099-R tax wassa 6 Taxable amount Social security benefits Tatal come. Addines Sa through. Add any amount from Schedule 1. in 22 Adjusted gross income. If you have ne adjustments to come enter the amount from ine; otherwise, subtract scheine 36, from line 6 Standard deduction or itemized deductions from the Quated business income deduction (se naructions) Taxable income Subtract lines and from time 7. If we ress, Tun 10 11 city or Quang widower, 124,000 12 ( check if yo 2 4972 30 b Add y n from Schedule and check here..... a Chi tax credited to the depende Add any trom Schedule and check here Subtine 12 vom line 11 or e 13 14 15 Other tatt Attach Scheda 14...... . A 16 Federal com a thermoms wand 1093 M Refundable scho yant from schedules A 16 ana . These are your payment. in 18 more than I urte is troine 1. This the moun 18 19 Refund a tots warehunded to you the check Det er 21 A nd one you want applied to your 22 Amount you were 18 ani de Amount You Owe ) plate Alde' Schedule 1 for 2018 ONS No. 1545-0574 Additional Income and Adjustments to Income partment of the 2018 Attach to Por 10 Go to www.ire.gov/Pernuto48 for instructions and the latest Information mes) shown on Form 1040 red E. and Beulah A dditional ncome Taxable refunds, credits, or offsets of state and local incor 12 13 Business income or (los). Attach Schedule Cor Capital gain or loss. Attach Schedule D required. not 14 Other gains or ) Attach Form 4797 Schedule 18 Farm Income oro). Attach S 19 Unemployment compe 20a Reserved 21 Other Income List type and amount 22 Combine the amounts in the far right column. If you don't have any adjustments to income, enter there and include on Form 1040 6. Otherwise, gata line 23 ducator expenses Adjustments 23 to Income 24 Certain business expenses of reservists performing arts, and fee basis povernment officials. Attach Form 2106 Heath savings account deduction. Attach Form as 26 Moving expenses ar ambers of me Armed Forces. Attach Form 1903... 27 Deductible part of w ayment tax. Attach Schedule SE. 28 Self-empoyed SSCHLE, and quaedas 29 Setemployed the insurance deduction 30 ay an early thwave 11 Armory padres 14 33 IRA deduction 33 Student an interested HE 3 Reserved 36 Alves Paperwork Reduction Act Notice, see your tax return instructions. Note: This problem is for the 2018 tax year. Alfred E. Old and Beulah A. Crane, each age 42, married on September 7, 2016. Alfred and Beulah will file a joint return for 2018. Alfred's Social Security number is 111-11-1109. Beulah's Social Security number is 123-45-6780, and she adopted "old" as her married name. They live at 211 Brickstone Drive, Atlanta, GA 30304. Alfred was divorced from Sarah Old in March 2016. Under the divorce agreement, Alfred is to pay Sarah $1,250 per month for the next 10 years or until Sarah's death, whichever occurs first. Alfred pays Sarah $15,000 in 2018. In addition, in January 2018, Alfred pays Sarah $50,000, which is designated as being for her share of the marital property. Also, Alfred is responsible for all prior years' income taxes. Sarah's Social Security number is 123-45-6788. Alfred's salary for 2018 is $150,000. He is an executive working for Cherry, Inc. (Federal I.D. No. 98-7654321). As part of his compensation package, Cherry provides him with group term life insurance equal to twice his annual salary. His employer withheld $24,900 for Federal income taxes and $8,000 for state income taxes. The proper amounts were withheld for FICA taxes. Beulah recently graduated from law school and is employed by Legal Aid Society, Inc. (Federal I.D. No. 11-1111111), as a public defender. She receives a salary of $42,000 in 2018. Her employer withheld $7,500 for Federal income taxes and $2,400 for state income taxes. The proper amounts were withheld for FICA taxes. Alfred and Beulah had interest income of $500. Alfred and Beulah receive a $1,900 refund on their 2017 state income taxes. They itemized deductions on their 2017 Federal income tax return (total of $15,000). Alfred and Beulah pay $4,500 interest and $1,450 property taxes on their personal residence in 2018. Their charitable contributions total $2,400 (all to their church). They paid sales taxes of $1,400, for which they maintain the receipts. Both spouses had health insurance for all months of 2018 and do not want to contribute to the Presidential Election Campaign. Preparer Use Only BAA For Disclosure, Privacy Act, and Paperwork Maduction Act Notke, des par Form 1040 (2018) Alfred and Beulah A. Old Wages, salaries, tips, Attach Forms) Taxable interest Ordinary dividends TRAS, pensions, and Attach Forms) W- 2. Also attach Forms) W-26 and 1099-R tax wassa 6 Taxable amount Social security benefits Tatal come. Addines Sa through. Add any amount from Schedule 1. in 22 Adjusted gross income. If you have ne adjustments to come enter the amount from ine; otherwise, subtract scheine 36, from line 6 Standard deduction or itemized deductions from the Quated business income deduction (se naructions) Taxable income Subtract lines and from time 7. If we ress, Tun 10 11 city or Quang widower, 124,000 12 ( check if yo 2 4972 30 b Add y n from Schedule and check here..... a Chi tax credited to the depende Add any trom Schedule and check here Subtine 12 vom line 11 or e 13 14 15 Other tatt Attach Scheda 14...... . A 16 Federal com a thermoms wand 1093 M Refundable scho yant from schedules A 16 ana . These are your payment. in 18 more than I urte is troine 1. This the moun 18 19 Refund a tots warehunded to you the check Det er 21 A nd one you want applied to your 22 Amount you were 18 ani de Amount You Owe ) plate Alde' Schedule 1 for 2018 ONS No. 1545-0574 Additional Income and Adjustments to Income partment of the 2018 Attach to Por 10 Go to www.ire.gov/Pernuto48 for instructions and the latest Information mes) shown on Form 1040 red E. and Beulah A dditional ncome Taxable refunds, credits, or offsets of state and local incor 12 13 Business income or (los). Attach Schedule Cor Capital gain or loss. Attach Schedule D required. not 14 Other gains or ) Attach Form 4797 Schedule 18 Farm Income oro). Attach S 19 Unemployment compe 20a Reserved 21 Other Income List type and amount 22 Combine the amounts in the far right column. If you don't have any adjustments to income, enter there and include on Form 1040 6. Otherwise, gata line 23 ducator expenses Adjustments 23 to Income 24 Certain business expenses of reservists performing arts, and fee basis povernment officials. Attach Form 2106 Heath savings account deduction. Attach Form as 26 Moving expenses ar ambers of me Armed Forces. Attach Form 1903... 27 Deductible part of w ayment tax. Attach Schedule SE. 28 Self-empoyed SSCHLE, and quaedas 29 Setemployed the insurance deduction 30 ay an early thwave 11 Armory padres 14 33 IRA deduction 33 Student an interested HE 3 Reserved 36 Alves Paperwork Reduction Act Notice, see your tax return instructions