Tax Return Problem - Income Focus

Amalia Huxley, age 45, is a widow who lives at 2738 Gifford Ave., Apartment B, in Brooklyn, New York, 11216. Her social security number is 123-45-6789. Amalia considers herself a Jill of All Trades, and works as a hairstylist for the Bird House hair salon, as a yoga instructor for Tangerine Yoga, and also works as a part-time dog-walker for NYC Pooch. Amalia has received a form W-2 from all 3 of her employers reporting her 2022 earnings and withholdings.

In 2020, after a protracted battle with cancer, Amalias husband, Fred, passed away. Unfortunately, their medical insurance did not cover all the hospital bills, so Amalia has struggled to pay the medical bills over the past two years. Thankfully, shes been able to work out a payment plan, which includes Brooklyn Cancer Hospital canceling $10,000 of the amount she owed them. As a result, Amalia has received a Form 1099-C from the hospital (see exhibits).

The grocery store where Amalia shops, the Pal Deli and Supermarket, also sells lottery tickets. Amalia likes to occasionally take a risk and will sometimes buy a ticket. In January of 2022, she purchased a $5 ticket and won $5,000. As a result, she received a 2022 Form W-2G from the New York Lottery (see exhibits). Also, during January 2022, Amalias Aunt Dorothy kindly sent her a birthday gift of $3,000.

Enjoying her recent windfall from her lottery winnings and her birthday gift, Amalia decided to invest the money by purchasing a few dividend paying stocks. She purchased $1,000 each of four stocks in Vail Resorts, Abb Vie, Consolidated Edison and Enbridge. All of the stocks pay dividends. Amalia received a 2022 Form 1099-DIV for all four of these investments (see exhibits).

In addition, Amalia decided to invest $1,500 in a CD with State Exchange Bank and another $1,500 in a Vio bank online savings account. She received a 2022 Form 1099-INT from both savings institutions (included in the exhibits).

Complete Schedule B, Schedule 1, and page 1 of Form 1040 through line 11 (adjusted gross income). We use 2021 tax forms for the solution because the 2022 tax forms were not available at the time of publication.

Tax Return Problem - Income Focus

Amalia Huxley, age 45, is a widow who lives at 2738 Gifford Ave., Apartment B, in Brooklyn, New York, 11216. Her social security number is 123-45-6789. Amalia considers herself a Jill of All Trades, and works as a hairstylist for the Bird House hair salon, as a yoga instructor for Tangerine Yoga, and also works as a part-time dog-walker for NYC Pooch. Amalia has received a form W-2 from all 3 of her employers reporting her 2022 earnings and withholdings.

In 2020, after a protracted battle with cancer, Amalias husband, Fred, passed away. Unfortunately, their medical insurance did not cover all the hospital bills, so Amalia has struggled to pay the medical bills over the past two years. Thankfully, shes been able to work out a payment plan, which includes Brooklyn Cancer Hospital canceling $10,000 of the amount she owed them. As a result, Amalia has received a Form 1099-C from the hospital (see exhibits).

The grocery store where Amalia shops, the Pal Deli and Supermarket, also sells lottery tickets. Amalia likes to occasionally take a risk and will sometimes buy a ticket. In January of 2022, she purchased a $5 ticket and won $5,000. As a result, she received a 2022 Form W-2G from the New York Lottery (see exhibits). Also, during January 2022, Amalias Aunt Dorothy kindly sent her a birthday gift of $3,000.

Enjoying her recent windfall from her lottery winnings and her birthday gift, Amalia decided to invest the money by purchasing a few dividend paying stocks. She purchased $1,000 each of four stocks in Vail Resorts, Abb Vie, Consolidated Edison and Enbridge. All of the stocks pay dividends. Amalia received a 2022 Form 1099-DIV for all four of these investments (see exhibits).

In addition, Amalia decided to invest $1,500 in a CD with State Exchange Bank and another $1,500 in a Vio bank online savings account. She received a 2022 Form 1099-INT from both savings institutions (included in the exhibits).

Complete Schedule B, Schedule 1, and page 1 of Form 1040 through line 11 (adjusted gross income). We use 2021 tax forms for the solution because the 2022 tax forms were not available at the time of publication.

CORRECTED (if checked) Form 1099-DIV (Rev. 1-2022) (keep for your records) Www.irs.gov/Form1099DIV Department of the Treasury - Intemal Revenue Service CORRECTED (if checked) Form 1099-C (Rev. 1-2022) (keep for your records) www.irs.gov/Form1099C Department of the Treasury - Internal Revenue Service CORRECTED (if checked) Form 1099-DIV (Rev. 1-2022) (keep for your records) www.irs.gov/Form1099DIV Department of the Treasury - Internal Revenue Service CORRECTED (if checked) Form 1099-DIV (Rev. 1-2022) (keep for your records) WWW.irs.gov/Form1099DIV Department of the Treasury - Intemal Revenue Service CORRECTED (if checked) Form 1099-DIV (Rev. 1-2022) (keep for your records) wWw.irs.gov/Form1099DIV Department of the Treasury - Internal Revenue Service CORRECTED (if checked) Form 1099-INT (Rev. 1-2022) (keep for your records) www.irs.gov/Form1099INT Department of the Treasury - Intemal Revenue Service CORRECTED (if checked) Form 1099-INT (Rev. 1-2022) (keep for your records) Www.irs.gov/Form1099INT Department of the Treasury - Intemal Revenue Service CORRECTED (if checked) Under penalties of perjury, I declare that, to the best of my knowledge and belief, the name, address, and taxpayer identification number that I have fumished correctly identify me as the recipient of this payment and any payments from identical wagers, and that no other person is entitled to any part of these payments. Signature Date Form W-2G (Rev. 1-2021) www.irs.gov/FormW2G Department of the Treasury - Internal Revenue Service Copy B-To Be Filed With Employee's FEDERAL Tax Return. This information is being furnished to the Internal Revenue Service. Copy B-To Be Filed With Employee's FEDERAL Tax Return. This information is being furnished to the internal Revenue Service. Copy B-To Be Flled With Employee's FEDERAL Tax Return. This information is being furnished to the Internal Revenue Service. CORRECTED (if checked) Form 1099-DIV (Rev. 1-2022) (keep for your records) Www.irs.gov/Form1099DIV Department of the Treasury - Intemal Revenue Service CORRECTED (if checked) Form 1099-C (Rev. 1-2022) (keep for your records) www.irs.gov/Form1099C Department of the Treasury - Internal Revenue Service CORRECTED (if checked) Form 1099-DIV (Rev. 1-2022) (keep for your records) www.irs.gov/Form1099DIV Department of the Treasury - Internal Revenue Service CORRECTED (if checked) Form 1099-DIV (Rev. 1-2022) (keep for your records) WWW.irs.gov/Form1099DIV Department of the Treasury - Intemal Revenue Service CORRECTED (if checked) Form 1099-DIV (Rev. 1-2022) (keep for your records) wWw.irs.gov/Form1099DIV Department of the Treasury - Internal Revenue Service CORRECTED (if checked) Form 1099-INT (Rev. 1-2022) (keep for your records) www.irs.gov/Form1099INT Department of the Treasury - Intemal Revenue Service CORRECTED (if checked) Form 1099-INT (Rev. 1-2022) (keep for your records) Www.irs.gov/Form1099INT Department of the Treasury - Intemal Revenue Service CORRECTED (if checked) Under penalties of perjury, I declare that, to the best of my knowledge and belief, the name, address, and taxpayer identification number that I have fumished correctly identify me as the recipient of this payment and any payments from identical wagers, and that no other person is entitled to any part of these payments. Signature Date Form W-2G (Rev. 1-2021) www.irs.gov/FormW2G Department of the Treasury - Internal Revenue Service Copy B-To Be Filed With Employee's FEDERAL Tax Return. This information is being furnished to the Internal Revenue Service. Copy B-To Be Filed With Employee's FEDERAL Tax Return. This information is being furnished to the internal Revenue Service. Copy B-To Be Flled With Employee's FEDERAL Tax Return. This information is being furnished to the Internal Revenue Service