Tax Return Problems Communications Decision Making Tax Forms Problem Daniel B Butler and his spouse Freida C Butler file a joint return The Butlers live at 625 Oak Street in Corbin, KY 40701 Dans Social Security number is 111 11 1112, and Freidas is 123 45 6780 Dan was born on January 15, 1971, and Freida was born on August 20, 1971 During 2022, Dan and Freida furnished over half of the total support of each of the following individuals, all of whom still live at home Gina, their daughter, age 22, a full time student, who married on December 21, has no income of her own and did not file a joint return with her husband, Casey, who earned $10,600 during 2022 Ginas Social Security number is 123 45 6788 Willie, their son, age 19, graduated high school in May 2022 He is taking a leap year and will not begin college until 2023 He had gross income of $6,300 in 2022 Willies Social Security number is 123 45 6787 Ben, their oldest son, age 26, is a full time graduate student with gross income of $5,200 Bens Social Security number is 123 45 6786 Dan was employed as a manager by WJJJ, Inc (employer identification number 11 1111111, 604 Franklin Street, Corbin, KY 40702), and Freida was employed as a salesperson for Corbin Realty, Inc (employer identification number 98 7654321, 899 Central Street, Corbin, KY 40701) Selected information from the W2 forms provided by the employers is presented below Dan and Freida use the cash method Line Description Dan Freida 1 Wages, tips, other compensation $74,000 $86,000 2 Federal income tax withheld 11,000 12,400 17 State income tax withheld 2,960 3,440 Freida sold a house on December 30, 2022, and will be paid a commission of $3,100 (not included in the $86,000 reported on the W2) on the January 10, 2023, closing date Other income (as reported on 1099 forms) for 2022 consisted of the following Dividends on CSX stock (qualified) $4,200 Interest on savings at Second Bank 1,600 Interest on City of Corbin bonds 900 Interest on First Bank CD 382 The $382 from First Bank was an original issue discount Dan and Freida collected $16,000 on the First Bank CD that matured on September 30, 2022 The CD was purchased on October 1, 2019, for $14,995, and the yield to maturity was 3 3 Dan participated on a game show and won a cash prize of $7,000 In addition to the above information, Dan and Freidas itemized deductions included the following Paid on 2022 Kentucky income tax $ 700 Personal property tax paid 600 Real estate taxes paid 1,800 Interest on home mortgage (Corbin S L) 4,900 Sales tax from the sales tax table is $1,860 Dan and Freida made Federal estimated tax payments of $6,000 They have never owned or used any digital assets, and they do not wish to contribute to the Presidential Election Campaign The Kentucky income tax rate is 4 Compute Dan and Freidas 2022 Federal income tax payable (or refund due), and complete their 2022 tax return using the appropriate forms and schedules

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Tax Return Problems Communications Decision Making Tax Forms Problem Daniel B. Butler and his spouse Freida C. Butler file a joint return. The Butlers live

Tax Return Problems

Communications

Decision Making

Tax Forms Problem

Daniel B. Butler and his spouse Freida C. Butler file a joint return. The Butlers live at 625 Oak Street in Corbin, KY 40701. Dans Social Security number is 111-11-1112, and Freidas is 123-45-6780. Dan was born on January 15, 1971, and Freida was born on August 20, 1971.

During 2022, Dan and Freida furnished over half of the total support of each of the following individuals, all of whom still live at home:

Gina, their daughter, age 22, a full-time student, who married on December 21, has no income of her own and did not file a joint return with her husband, Casey, who earned $10,600 during 2022. Ginas Social Security number is 123-45-6788.
Willie, their son, age 19, graduated high school in May 2022. He is taking a leap year and will not begin college until 2023. He had gross income of $6,300 in 2022. Willies Social Security number is 123-45-6787.
Ben, their oldest son, age 26, is a full-time graduate student with gross income of $5,200. Bens Social Security number is 123-45-6786.

Dan was employed as a manager by WJJJ, Inc. (employer identification number 11-1111111, 604 Franklin Street, Corbin, KY 40702), and Freida was employed as a salesperson for Corbin Realty, Inc. (employer identification number 98-7654321, 899 Central Street, Corbin, KY 40701). Selected information from the W2 forms provided by the employers is presented below. Dan and Freida use the cash method.

Line	Description	Dan	Freida
1	Wages, tips, other compensation	$74,000	$86,000
2	Federal income tax withheld	11,000	12,400
17	State income tax withheld	2,960	3,440

Freida sold a house on December 30, 2022, and will be paid a commission of $3,100 (not included in the $86,000 reported on the W2) on the January 10, 2023, closing date.

Other income (as reported on 1099 forms) for 2022 consisted of the following:

Dividends on CSX stock (qualified)	$4,200
Interest on savings at Second Bank	1,600
Interest on City of Corbin bonds	900
Interest on First Bank CD	382

The $382 from First Bank was an original issue discount. Dan and Freida collected $16,000 on the First Bank CD that matured on September 30, 2022. The CD was purchased on October 1, 2019, for $14,995, and the yield to maturity was 3.3%. Dan participated on a game show and won a cash prize of $7,000.

In addition to the above information, Dan and Freidas itemized deductions included the following:

Paid on 2022 Kentucky income tax	$ 700
Personal property tax paid	600
Real estate taxes paid	1,800
Interest on home mortgage (Corbin S&L)	4,900

Sales tax from the sales tax table is $1,860. Dan and Freida made Federal estimated tax payments of $6,000. They have never owned or used any digital assets, and they do not wish to contribute to the Presidential Election Campaign. The Kentucky income tax rate is 4%.

Compute Dan and Freidas 2022 Federal income tax payable (or refund due), and complete their 2022 tax return using the appropriate forms and schedules.