Tax Return

Please complete the 2021 federal income tax return for Magdalena Schmitz. Ignore the requirement to attach the form(s) W-2 to the front page of the Form 1040. If required information is missing, use reasonable assumptions to fill in the gaps. Refer to the2021 tax ratesgiven below too.

Magdalena Schmitz has undergone some major changes in her life recently. In 2020, at the age of 46, her husband, Roger, passed away. Magdalena has not remarried as of the end of 2021. Magdalena currently lives in Bedford, Pennsylvania. She was living in Pittsburgh when her husband passed away but she moved back to her childhood home so she could get help from her family raising her children. Magdalena was employed in Pittsburgh early in the year but left that job and relocated 100 miles away to pursue a new life and start her new job. Magdalena has three children (ages as of the end of the year): Alyssa (23), Tyler (16), and Connor (11). Magdalena would like to determine her federal income tax under the filing status that is most advantageous for her. Magdalena reported the following information: Magdalena's social security number is 294-83-2845 . Alyssa's social security number is 824-84-8456 Tyler's social security number is 824-34-9584 Connor's social security number is 824-56-2984 Magdalena's mailing address is 623 S. Liberty Road Bedford, Pennsylvania 15522 Alyssa is unmarried and a full-time graduate student at Pennsylvania State University (PSU) (EIN 33- 9876543). PSU's address is 1250 Happy Valley, State College, PA 16801. She received her bachelor's degree the year her father passed away. This year represents her fifth year of full-time higher education schooling. Alyssa works part-time in State College to help with some of her living expenses. Alyssa earned $2,300 in gross income during the year and had her income tax return prepared on campus by Volunteer Income Tax Assistance (VITA) volunteers. Magdalena provided support for Alyssa including paying for rent, books, tuition, food, clothes, medicine, and other support items. In total, Magdalena provided $12,700 of support for the year. PSU provided Alyssa with a Form 1098-T at year end. Alyssa's higher education expenses for her university studies were as follows: Tuition $6,500 Books $2,000In order to for Magdalena to maintain a full-time job, she sends Connor to a day care program after school five days a week. During the year, Magdalena paid the day care operator $4,250 for Connor's care. The day care details are as follows: Horizon Day Care 452 S. Patriot Road Bedford, PA 15522 EIN: 43-6598324 Magdalena's W-2s for the year reported the following: Employer Gross Wages Federal Income Tax State Income Tax Withholding Withholding Juniata Development $48,435 $900 $700 Corporation Pittsburgh Real Estate $2,450 $200 $125 Magdalena's employers withheld all applicable and appropriate payroll taxes. Magdalena received her Economic Impact Payment (stimulus check) in 2021. On January 1, 2020 (the prior year), Magdalena started a photography business in which she takes bridal and wedding photographs. She does not do any of the professional printing. However, she provides all the digital files to her clients on a password-protected web site as part of her service. This unique service, along with her skill and reputation, has allowed her to earn additional money on the weekends, primarily in the summer, to help support her daughter in college. Magdalena rents all the camera equipment and does not currently own any equipment herself. The photography business uses the cash method of accounting. The business did not have any obligation to file a Form 1099 to any payee during the year. Magdalena reported the following revenue and expenses for her business this year: Gross Revenue $6,500 Photographic supplies $ 430 Camera rental $1,050 Web site hosting fee $ 200 Magdalena also received the following amounts in 2021: Life Insurance Payment-Mutual Life (Mother's passing) $150,000 Cash gift from her father 5,000 Interest income-First Bank of Bedford 310 Interest income-General Electric Bond 3,200 Interest income-Bedford School District Municipal Bond 2,500 Interest income-Johnstown Rural Improvement District Bond 1,300 PA state income tax refund* 325 *Refund was from state tax she paid in 2020. Magdalena deducted all her state taxes as itemized deductions, and received full tax benefit for the deductions, on her 2020 federal tax return.Magdalena did not own, control or manage any foreign bank accounts, nor was she a grantor or beneficiary of a foreign trust during the tax year. She also did not receive, sell, send, exchange, or otherwise acquire any financial interest in any virtual currency in 2021. Magdalena made the following payments during 2021: Dentist (unreimbursed by insurance) $1,500 Doctors (unreimbursed by insurance) S 475 Prescriptions (unreimbursed by insurance) 255 Real property taxes on residence S 950 Vehicle registration fee based upon age of vehicle S 175 Mortgage interest on principal residence (Form 1098 received) $6,845 Contribution to the American Lung Association $ 600 Contribution to the Habitat for Humanity $1,000 Contribution to Methodist Church of PA $3,000 Contribution to Penn State University $ 400 Magdalena wants to contribute to the Presidential Election Campaign Fund. She would like to receive a refund (if any) of any tax she may have overpaid for the year. Her preferred method of receiving the refund is by check.Tax Rates 2021 Tax Rate Schedules Individuals Schedule X-Single Schedule Z-Head of Household If taxable If taxable income is But not income is But not over: over: The tax is: over: over: The tax is: $ 9.950 10% of taxable income 0 $ 14,200 10% of taxable income $ 9.950 $ 40.525 $995 plus 12% of the excess $ 14.200 $ 54.200 $1,420 plus 12% of the excess over $9,950 over $14,200 $ 40,525 $ 86.375 $4.664 plus 22% of the excess $ 54.200 $ 86,350 $6,220 plus 22% of the excess over $40,525 over $54,200 $ 86,375 $164,925 $14,751 plus 24% of the excess $ 86,350 $164.900 $13,293 plus 24% of the excess over $86,375 over $86,350 $164,925 $209,425 $33,603 plus 32% of the excess $164,900 $209.400 $32,145 plus 32% of the excess over $164.925 over $164,900 $209,425 $523,600 $47.843 plus 35% of the excess $209,400 $523,600 $46,385 plus 35% of the excess over $209,425 over $209,400 $523,600 $157,804.25 plus 37% of the excess $523,600 $156,355 plus 37% of the excess over $523,600 over $523,600 Schedule Y-1-Married Filing Jointly Schedule Y-2-Married Filing Separately or Qualifying Widow(er) If taxable If taxable income is But not income is But not over: over: The tax is: over: over: The tax is: 0 $ 9,950 10% of taxable income 0 $ 19,900 10% of taxable income 9.950 $ 40,525 $995 plus 12% of the excess $ 19,900 $ 81,050 $1,990 plus 12% of the excess over $ 9,950 over $19,900 $ 40,525 $ 86,375 $4,664 plus 22% of the excess $ 81,050 $172,750 $9,328 plus 22% of the excess over $40,525 over $81,050 $ 86,375 $164,925 $14,751 plus 24% of the excess $172,750 $329,850 $29,502 plus 24% of the excess over $86,375 over $172,750 $164,925 $209,425 $33,603 plus 32% of the excess $329,850 $418,850 $67,206 plus 32% of the excess over $164,925 over $329,850 $209,425 $314,150 $47,843 plus 35% of the excess $418,850 $628,300 $95,686 plus 35% of the excess over $209,425 over $418,850 $314,150 $84,496.75 plus 37% of the excess $628,300 $168,993.50 plus 37% of the excess over $314,150 over $628,300Estates and Trusts If taxable income is But not over: over: The tax is: S 0 $ 2,650 10% of taxable income $ 2,650 $ 9.550 $265 plus 24% of the excess over $2,650 $ 9.550 $13,050 $1,921 plus 35% of the excess over $9,550 $13,050 $3, 146 plus 37% of the excess over $13,050 Tax Rates for Net Capital Gains and Qualified Dividends Taxable Income Married Married Head of Trusts Rate* Filing Jointly Filing Separately Single Household and Estates 0% 50-$80,800 $0-$40,400 $0-$40,400 $0-$54,100 $0-$2,700 15% $80,801-$501,600 $40,401-$250,800 $40,401-$445,850 $54,101-$473,750 $2,701-$13,250 20% $501,601+ $250,801+ $445,851+ $473,751+ $13,251+ "This rate applies to the net capital gains and qualified dividends that fall within the range of taxable income specified in the table (net capital gains and qualified dividends are included in taxable income last for this purpose)- Basic Standard Deduction Amounts* Amount of Each Additional Standard Deduction for Taxpayers Who Are Age 65 or Blind 2020 2021 Filing Status Amount Amount 2020 2021 Amount Amount Married Filing Jointly $24,800 $25,100 Qualifying Widow or Widower $24,800 $25,100 Married taxpayers $1,300 $1,350 Married Filing Separately $12,400 $12,550 Single taxpayer or head of household $1,650 $1,700 Head of Household $18,650 $18,800 Single $12,400 $12 550 Exemption Amount* *For individuals claimed as a dependent on another return, the 202 1 standard deduction is the greater of (1) $1, 100 or (2) $350 plus earned income not to 2020 exceed the standard deduction amount of those who are not dependents. $4,300 $4,300 Used for qualifying relative gross income test. Corporations Rate Taxable Income 21% All