Tax Return 1: Linda B. Taylor is a single mom who lives at 671 Lake Drive, Apt. 9, Los Angeles, CA 90024 with her son, John Taylor and her father, Andy Taylor. For 2021, Taylor family had following receipts: 1. Alimony Payments from Kurt Allen $20,000 $40,000 2. Cash Income (side business of making hand woven Berets) 3. Federal Refund (for 2020 Tax Return) $2,000 4. Social Security Benefits (Andy Taylor) $8,000 5. Life Insurance Proceeds from Andy $700,000 She also provided following expenses for 2021: $6,500 1. Medical Expenses (not covered by Health Insurance) 2. Cash Charitable Contributions - Various Dates $2,000 3. Rent Expenses $24,000 4. Utilities Expenses 5. Funeral Expenses for Andy $1,500 $15,000 $500 6. California Tax (for 2020) Linda was married to Kurt for 10 years. Their divorce was finalized on September 04, 2017 and has never been modified ever since. Per the agreement, Kurt is supposed to pay $20,000 in alimony every year for 7 years from the date of divorce. Alimony amount neither contain separate maintenance payments nor child support payments. To support herself and her family, Linda started a side business of selling hand woven Berets on May 5th, 2021. All her sales were from online sales. She provided following expenses: 1. Raw Material Purchases (no ending inventory) $12,000 2. Supplies $5,000 3. Website Fees $1,000 4. Advertisement $1,500 5. Course (to better her weaving skills) $3,000 6. Magazine Subscription (to stay up to date with trends) $600 7. Bank Fees $100 8. Internet Expenses $300 She also bought a weaving equipment worth $7,000 (life 5 years) to help her with the weaving process. She put it to use the same day she started her business. She requested to take bonus depreciation for the equipment. She also mentioned that she uses a section of her apartment for business purpose only. Total area of her apartment is 1,200 sq. ft and she 150 sq. ft for her business only. Andy Taylor lived with them for all days until his death on March 17th, 2021. He received $8,000 in social security benefits. Of all his total expenses, 70% were covered by the social security benefits he received, and rest were covered by Linda. After his death, Linda, the beneficiary, received $700,000 in from life insurance policy of Andy. She paid $15,000 out of life insurance proceeds for his funeral. On Jan. 3rd, 2021, she invested $10 in Dogecoin (DOGE) Cryptocurrency and received 200 coins. After a sudden spike, she did the following with her 200 coins: Date 02/01/2021 Transaction Type Coin In Coin Out 20 DOGE Value $15,000 Sold 02/10/2021 Converted 1 BTC 70 DOGE $35,000 02/20/2021 Converted 5 ETHR 80 DOGE $20,000 The remainder of the coins she kept them in Dogecoin. Cost basis was not reported to the IRS for any coins. Following are the SSN and DOB information of the Taylor Family: Birth Date Social Security Number Linda Taylor (age 41) 123-00-6787 08/08/1980 John Taylor (age 13) 123-45-6778 10/09/2008 Andy Taylor (deceased at age 70) 123-45-6779 05/03/1950 All the members of the household had health insurance for the full year and received their stimulus checks. Linda also received $1,500 as advanced child tax credit for John in 2021. She supports John fully and claims him as a dependent. For the tax preparation, assume there were loss carryovers of any kind from prior years. Compute net federal tax payable or refund due for Linda Taylor for 2021. If they have overpaid, they want the amount to be refunded to them. Please use all relevant tax forms for your computation, you may need forms 1040, 8949, 4562, 8995, 8812, 8829, Schedules 1, 2, C, D, SE, Recovery Rebate Credit Worksheet, Tax Return 1: Linda B. Taylor is a single mom who lives at 671 Lake Drive, Apt. 9, Los Angeles, CA 90024 with her son, John Taylor and her father, Andy Taylor. For 2021, Taylor family had following receipts: 1. Alimony Payments from Kurt Allen $20,000 $40,000 2. Cash Income (side business of making hand woven Berets) 3. Federal Refund (for 2020 Tax Return) $2,000 4. Social Security Benefits (Andy Taylor) $8,000 5. Life Insurance Proceeds from Andy $700,000 She also provided following expenses for 2021: $6,500 1. Medical Expenses (not covered by Health Insurance) 2. Cash Charitable Contributions - Various Dates $2,000 3. Rent Expenses $24,000 4. Utilities Expenses 5. Funeral Expenses for Andy $1,500 $15,000 $500 6. California Tax (for 2020) Linda was married to Kurt for 10 years. Their divorce was finalized on September 04, 2017 and has never been modified ever since. Per the agreement, Kurt is supposed to pay $20,000 in alimony every year for 7 years from the date of divorce. Alimony amount neither contain separate maintenance payments nor child support payments. To support herself and her family, Linda started a side business of selling hand woven Berets on May 5th, 2021. All her sales were from online sales. She provided following expenses: 1. Raw Material Purchases (no ending inventory) $12,000 2. Supplies $5,000 3. Website Fees $1,000 4. Advertisement $1,500 5. Course (to better her weaving skills) $3,000 6. Magazine Subscription (to stay up to date with trends) $600 7. Bank Fees $100 8. Internet Expenses $300 She also bought a weaving equipment worth $7,000 (life 5 years) to help her with the weaving process. She put it to use the same day she started her business. She requested to take bonus depreciation for the equipment. She also mentioned that she uses a section of her apartment for business purpose only. Total area of her apartment is 1,200 sq. ft and she 150 sq. ft for her business only. Andy Taylor lived with them for all days until his death on March 17th, 2021. He received $8,000 in social security benefits. Of all his total expenses, 70% were covered by the social security benefits he received, and rest were covered by Linda. After his death, Linda, the beneficiary, received $700,000 in from life insurance policy of Andy. She paid $15,000 out of life insurance proceeds for his funeral. On Jan. 3rd, 2021, she invested $10 in Dogecoin (DOGE) Cryptocurrency and received 200 coins. After a sudden spike, she did the following with her 200 coins: Date 02/01/2021 Transaction Type Coin In Coin Out 20 DOGE Value $15,000 Sold 02/10/2021 Converted 1 BTC 70 DOGE $35,000 02/20/2021 Converted 5 ETHR 80 DOGE $20,000 The remainder of the coins she kept them in Dogecoin. Cost basis was not reported to the IRS for any coins. Following are the SSN and DOB information of the Taylor Family: Birth Date Social Security Number Linda Taylor (age 41) 123-00-6787 08/08/1980 John Taylor (age 13) 123-45-6778 10/09/2008 Andy Taylor (deceased at age 70) 123-45-6779 05/03/1950 All the members of the household had health insurance for the full year and received their stimulus checks. Linda also received $1,500 as advanced child tax credit for John in 2021. She supports John fully and claims him as a dependent. For the tax preparation, assume there were loss carryovers of any kind from prior years. Compute net federal tax payable or refund due for Linda Taylor for 2021. If they have overpaid, they want the amount to be refunded to them. Please use all relevant tax forms for your computation, you may need forms 1040, 8949, 4562, 8995, 8812, 8829, Schedules 1, 2, C, D, SE, Recovery Rebate Credit Worksheet