TAX RETURN PROBLEM #2: Michelle J. and Fred M. Jones are married taxpayers who lile a joint return, Their Social Security numbers are 123-45-6789 and 111-11-1112, respectively. Michelle's birthday is September 21, 1971, and Fred's is June 27, 1970. They live at 473 Revere Avenue, Stony Brook, 11850. Michelle is the office manager for Stony Brook Dental Clinic, 433 Broad Street, Stony Brook, NY 01850 (employer identification number 98-7654321). Fred is the manager of a Super Burgers fast-food outlet owned and operated by Plymouth Corporation, 1247 Central Avenue, Hauppauge, NY 11788 (employer identification number 11-1111111). The following information is shown on their Wage and Tax Statements (Form W-2) for 2019. Line 1 Michelle $58,000 Fred $62,100 2 4 5 6 15 16 Description Wages, tips, other compensation Federal income tax withheld Social Security wages Social Security tax withheld Medicare wages and tips Medicare tax withheld State State wages, tips, etc. State income tax withheld 4,500 58,000 3,596 58,000 841 New York 58,000 2,950 5.300 62,100 3,850 62,100 900 New York 62,100 3,100 The Jones's provide over half of the support of their two children, Cheryl (bom January 25, 1995, Social Security number 123-45-6788) and Jack (born February 7, 1999, Social Security number 123-45-6786). Both children are full-time students and live with the Jones's except when they are away at college, Cheryl earned $6,200 from a summer internship in 2019, and Jack earned $3,800 from a part-time job. During 2019, the Jones's provided 60% of the total support of Fred's widower father, Sam Jones (born March 6, 1942, Social Security number 123-45-6787). Sam lived alone and covered the rest of his support with his Social Security benefits. Sam died in November, and Fred, the beneficiary of a policy on Sam's life, received life insurance proceeds of $1,600,000 on December 28, The Jones's had the following expenses relating to their personal residence during 2019 $5,000 8,700 Property taxes Qualified interest on home mortgage (acquisition indebtedness) Repairs to roof Utilities Fire and theft insurance 5,750 4,100 1,900 The Jones's had the following medical expenses for 2019: $4,500 7,600 Medical insurance premiums Doctor bill for Sam incurred in 2017 and not paid until 2018 Operation for Sam Prescription medicines for Sam Hospital expenses for Sam Reimbursement from insurance company. received in 2019 8,500 900 3,500 3,600 The medical expenses for Sam represent most of the 60% that Fred contributed toward his father's support Other relevant information follows: When they filed their 2018 state return in 2019, the Jones's paid additional NYS income tax of $900. During 2019, Michelle and Fred attended a dinner dance sponsored by the Stony Brook Police Disability Association (a qualified charitable organization). The Jones's paid $300 for the tickets. The cost of comparable entertainment would normally be $50. The Jones's contributed $5,000 to Stony Brook Presbyterian Church and gave used clothing (cost of $1,200 and fair market value of $350) to the Salvation Army. All donations are supported by receipts, and the clothing is in very good condition. Via a crowdfunding site (gofundme.com), Michelle and Fred made a gift to a needy family who lost their home in a fire ($400). In addition, they made several cash gifts to homeless individuals downtown (estimated to be $65). 0 In 2019, the Jones's received interest income of $2,750, which was reported on a Form 1099-INT from Second National Bank, 125 Oak Street, Stony Brook, NY 01850 (Employer Identification Number 98-7654322). The home mortgage interest was reported on Form 1098 by Stony Brook Commercial Bank, P.O. Box 1000, Stony Brook, NY 01850 (Employer Identification Number 98-7654323). The mortgage (outstanding balance of $425,000 as of January 1, 2019) was taken out by the Jones's on May 1, 2014. Michelle's employer requires that all employees wear uniforms to work. During 2019, Michelle spent $850 on new uniforms and $566 on laundry charges. Fred paid $400 for an annual subscription to the Journal of Franchise Management and $741 for annual membership dues to his professional association Neither Michelle's nor Fred's employer reimburses for employee expenses. The Jones's do not keep the receipts for the sales taxes they paid and had no major purchases subject to sales tax All members of the Jones family had health insurance coverage for all of 2019. This year the Jones's gave each of their children $2,000, which was then deposited into their Roth IRAs. Michelle and Fred paid no estimated Federal income tax Neither Michelle nor Fred wants to designate $3 to the Presidential Election Campaign Fund. 0 o REQUIRED: Tax Computation Prepare their Federal tax return. Compute net tax payable or refund due for Michelle and Fred Jones for 2019. If they have overpaid, they want the amount to be refunded to them. You must prepare Form 1040, Schedules A & B and any other appropriate forms and schedules. You may use tax software such as ProConnect or TurboTax, or manually prepare their tax returns. Prepare their Federal income tax returns. You must submit all forms and schedules as PDF files, using the Dropbox in BB. Submit by the deadline date and time. No late work will be accepted!! Brackets Tax rate Single Married, filing joil 10% $0 to $9,700 $0 to $19,400 12% $9,701 to $39,475 $19,401 t $78,950 22% $39,476 to $84,200 $78,951 t $168,400 24% $84,201 to $160,725 $168,401 $321,450 32% $160,726 to $204,100 $321,451 $408,20 35% $204,101 to $510,300 $408,209 $612,350 37% $510,301 or more $612,351 more TAX RETURN PROBLEM #2: Michelle J. and Fred M. Jones are married taxpayers who lile a joint return, Their Social Security numbers are 123-45-6789 and 111-11-1112, respectively. Michelle's birthday is September 21, 1971, and Fred's is June 27, 1970. They live at 473 Revere Avenue, Stony Brook, 11850. Michelle is the office manager for Stony Brook Dental Clinic, 433 Broad Street, Stony Brook, NY 01850 (employer identification number 98-7654321). Fred is the manager of a Super Burgers fast-food outlet owned and operated by Plymouth Corporation, 1247 Central Avenue, Hauppauge, NY 11788 (employer identification number 11-1111111). The following information is shown on their Wage and Tax Statements (Form W-2) for 2019. Line 1 Michelle $58,000 Fred $62,100 2 4 5 6 15 16 Description Wages, tips, other compensation Federal income tax withheld Social Security wages Social Security tax withheld Medicare wages and tips Medicare tax withheld State State wages, tips, etc. State income tax withheld 4,500 58,000 3,596 58,000 841 New York 58,000 2,950 5.300 62,100 3,850 62,100 900 New York 62,100 3,100 The Jones's provide over half of the support of their two children, Cheryl (bom January 25, 1995, Social Security number 123-45-6788) and Jack (born February 7, 1999, Social Security number 123-45-6786). Both children are full-time students and live with the Jones's except when they are away at college, Cheryl earned $6,200 from a summer internship in 2019, and Jack earned $3,800 from a part-time job. During 2019, the Jones's provided 60% of the total support of Fred's widower father, Sam Jones (born March 6, 1942, Social Security number 123-45-6787). Sam lived alone and covered the rest of his support with his Social Security benefits. Sam died in November, and Fred, the beneficiary of a policy on Sam's life, received life insurance proceeds of $1,600,000 on December 28, The Jones's had the following expenses relating to their personal residence during 2019 $5,000 8,700 Property taxes Qualified interest on home mortgage (acquisition indebtedness) Repairs to roof Utilities Fire and theft insurance 5,750 4,100 1,900 The Jones's had the following medical expenses for 2019: $4,500 7,600 Medical insurance premiums Doctor bill for Sam incurred in 2017 and not paid until 2018 Operation for Sam Prescription medicines for Sam Hospital expenses for Sam Reimbursement from insurance company. received in 2019 8,500 900 3,500 3,600 The medical expenses for Sam represent most of the 60% that Fred contributed toward his father's support Other relevant information follows: When they filed their 2018 state return in 2019, the Jones's paid additional NYS income tax of $900. During 2019, Michelle and Fred attended a dinner dance sponsored by the Stony Brook Police Disability Association (a qualified charitable organization). The Jones's paid $300 for the tickets. The cost of comparable entertainment would normally be $50. The Jones's contributed $5,000 to Stony Brook Presbyterian Church and gave used clothing (cost of $1,200 and fair market value of $350) to the Salvation Army. All donations are supported by receipts, and the clothing is in very good condition. Via a crowdfunding site (gofundme.com), Michelle and Fred made a gift to a needy family who lost their home in a fire ($400). In addition, they made several cash gifts to homeless individuals downtown (estimated to be $65). 0 In 2019, the Jones's received interest income of $2,750, which was reported on a Form 1099-INT from Second National Bank, 125 Oak Street, Stony Brook, NY 01850 (Employer Identification Number 98-7654322). The home mortgage interest was reported on Form 1098 by Stony Brook Commercial Bank, P.O. Box 1000, Stony Brook, NY 01850 (Employer Identification Number 98-7654323). The mortgage (outstanding balance of $425,000 as of January 1, 2019) was taken out by the Jones's on May 1, 2014. Michelle's employer requires that all employees wear uniforms to work. During 2019, Michelle spent $850 on new uniforms and $566 on laundry charges. Fred paid $400 for an annual subscription to the Journal of Franchise Management and $741 for annual membership dues to his professional association Neither Michelle's nor Fred's employer reimburses for employee expenses. The Jones's do not keep the receipts for the sales taxes they paid and had no major purchases subject to sales tax All members of the Jones family had health insurance coverage for all of 2019. This year the Jones's gave each of their children $2,000, which was then deposited into their Roth IRAs. Michelle and Fred paid no estimated Federal income tax Neither Michelle nor Fred wants to designate $3 to the Presidential Election Campaign Fund. 0 o REQUIRED: Tax Computation Prepare their Federal tax return. Compute net tax payable or refund due for Michelle and Fred Jones for 2019. If they have overpaid, they want the amount to be refunded to them. You must prepare Form 1040, Schedules A & B and any other appropriate forms and schedules. You may use tax software such as ProConnect or TurboTax, or manually prepare their tax returns. Prepare their Federal income tax returns. You must submit all forms and schedules as PDF files, using the Dropbox in BB. Submit by the deadline date and time. No late work will be accepted!! Brackets Tax rate Single Married, filing joil 10% $0 to $9,700 $0 to $19,400 12% $9,701 to $39,475 $19,401 t $78,950 22% $39,476 to $84,200 $78,951 t $168,400 24% $84,201 to $160,725 $168,401 $321,450 32% $160,726 to $204,100 $321,451 $408,20 35% $204,101 to $510,300 $408,209 $612,350 37% $510,301 or more $612,351 more