Tax Return Problem 5 -Individual Tax Instructions: Please complete the 2016 federal income tax return for Joseph
Question:
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Tax Return Problem 5 -Individual Tax
Instructions:
Please complete the 2016 federal income tax return for Joseph and Diana Cohen.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 and described those assumptions in an attachment to the tax return.
Joseph and Diana Cohen live in Pleasantville, New Jersey.Joseph is the Vice-President of Sales at a small start-up company.Diana is a former advertising executive who currently consults with former clients.She also serves on the board of directors of an advertising company.The Cohens have three children Rebecca (age 18), Alan (age 15), and David (age 12). In January, Rebecca left home to attend a liberal arts college. All three children qualify as Joseph and Diana's federal income tax dependents. The Cohens plan to file a joint tax return.The Cohens provided the following information:
Joseph's social security number is 598-94-2583
Diana's social security number is 301-52-2942
Rebecca's social security number is 887-44-8710
Alan's social security number is 810-42-9092
David's social security number is 855-11-3021
The Cohen's mailing address is 85 North Maple Drive, Pleasantville, New Jersey 08233
Joseph Cohen reported the following the following information relating to his employment during the year:
Employer
Gross Wages
Federal Income Tax Withholding
State Income Tax Withholding
Alternative Energy
$118,325
$29,230
$15,000
The above amounts do not reflect any income items described below. Joseph's employer withheld all payroll taxes it was required to withhold.The entire Cohen family was covered by minimum essential health insurance during each month in 2016.The insurance was provided by Joseph's employer, Alternative Energy.
Diana Cohen received the following revenue during the year (she uses the cash method of accounting).
Consulting revenue reported to her on a Form 1099-MISC, Box 7
High-end Retail$32,000
Jensen's Health Products$8,500
Strategic Solutions$3,750
Board of director compensation reported to her on a Form 1099-MISC, Box 7
Natural Sunshine, Inc.$6,500
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