Tax Return Project #4 Instructions: Please complete the 2020 federal income tax return for Joanne Peters along with its supporting schedules if applicable (Schedule 1, Schedule 2, Schedule 3, Schedule A, Schedule B, Schedule C, Schedule SE, Form 2441, Form 8812, Form 8863, Form 8995). If required information is missing, use reasonable assumptions to fill in the gaps. Joanne Peters has undergone some major changes in her life recently. In 2019, at the age of 46, her husband, John, passed away. Joanne has not remarried as of the end of 2020. She 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. Joanne was employed in Pittsburgh early in the year but left that job and relocated 150 miles away to pursue a new life and start her new job. Joanne has three children (ages as of the end of the year): Sarah (23), Thomas (16), and Jake (9). Joanne would like to determine her federal income tax under the filing status that is most advantageous for her. Joanne reported the following information: Joannes social security number is 294-85-2843 Sarahs social security number is 824-74-8453 Thomas social security number is 823-33-9784 Jakes social security number is 825-56-2973 Joannes mailing address is 620 N. Liberty Parkway Bedford, Pennsylvania 15522 Sarah is unmarried and a full-time graduate student at Pennsylvania State University (PSU) (EIN 33-9876543). PSUs address is 1250 Happy Valley, State College, PA 16801. She received her bachelors degree the year her father passed away. This year represents her fourth year of full-time higher education schooling. Sarah works part-time in State College to help with some of her living expenses. Sarah earned $2,800 in gross income during the year and had her income tax return prepared on campus by Volunteer Income Tax Assistance (VITA) volunteers. Joanne provided support for Sarah including paying for rent, books, tuition, food, clothes, medicine, and other support items. In total, Joanne provided $14,500 of support for the year. PSU provided Sarah with a Form 1098-T at year end. Sarahs higher education expenses for her university studies were as follows: Tuition $6,800 Books $1,800 In order to for Joanne to maintain a full-time job, she sends Jake to a day care program after school five days a week. During the year, Joanne paid the day care operator $4,250 for Jakes care. The day care details are as follows: Lighthouse Day Care 751 Sunrise Road Bedford, PA 15522 EIN: 43-7498314 Joannes W-2s for the year reported the following: Employer Gross Wages Federal Income Tax Withholding State Income Tax Withholding Sunshine Development Corporation $68,400 $2,200 $800 Pittsburgh Real Estate $2,350 $300 $1250 Joannes employers withheld all applicable and appropriate payroll taxes. She is not eligible for the Recovery Rebate Credit. On January 1, 2019 (the prior year), Joanne 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. Joanne 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. Joanne reported the following revenue and expenses for her business this year: Revenue $6,500 Photographic supplies $ 430 Camera rental $1,050 Web site hosting fee $ 200 Joanne also received the following amounts in 2020: Life Insurance Payment-Mutual Life (Mothers 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 2019. Joanne deducted all her state taxes as itemized deductions, and received full tax benefit for the deductions, on her 2019 federal tax return. Joanne 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 acquire or dispose of any virtual currency in 2020. Joanne made the following payments during 2020: Dentist (unreimbursed by insurance) $1,500 Doctors (unreimbursed by insurance) $ 475 Prescriptions (unreimbursed by insurance) $ 255 Real property taxes on residence $ 950 Vehicle registration fee based upon age of vehicle $ 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 Joanne 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.