Tax Return Project Due December 4th (CORRECTED)

Required:

• Using the information provided, prepare the 2018 federal tax return for Cal and Evann Malec. The forms that need to be filled in are as follows:

  • Form 1040

  • Schedules 1, 3, 4, and 5

  • Schedules A, B, C, D, and E

  • Form 8949, Form 4562 (2 - one for DogWalker and one for rental) and Form 8863

  • Schedule SE (2 - One for Cal and one For Evann)

  • Helpful worksheets from Form 1040 instructions on page 40, 37, 96, and 7

• The return should be prepared manually. You are not allowed to use return software. The tax forms from the IRS allow typing, so you may complete the forms using typing or handwriting. Please write legibly if you fill in the forms by hand. Any supplemental schedules or election statements that should be attached to the return may be typed.

• The forms, schedules, and instructions can be found at the IRS website (www.irs.gov). The instructions can be helpful in completing the return and identifying the appropriate tax forms.

• Include the names of your groups members on the Return Summary Form.

• Attach an excel spreadsheet showing the calculation of the tax.

• Fill in the attached Return Summary Form and submit with the prepared return (page 4) and attach to the front of the tax return.

Facts:

1) Cal A. and Evann M. Malec are married and file a joint return. Cal is self-employed as a professional dog walker and Evann is a college science professor. Cal and Evann have three children. The oldest is Chase, who lives at home. Chase is a full-time nursing student at the University of Nebraska and worked part time during the year earning $1,500, which he spent for his own support. Cal and Evann provided $6,000 towards Chase support (including $4,000 for fall tuition). They also provided over half the support of their daughter, Alexis, who is a full-time student at the University of Nebraska. Alexis lived at home until she was married in December of 2018. She filed a joint return with her husband, Darin, who earned $40,000 during the year. Becky is the youngest and lived with Cal and Evann for the entire year. The Malecs provide you with the following additional information:

• The Malecs do not want to contribute to the presidential election campaign

• The Malecs live at 6910 NW 3rd Street Lincoln, Nebraska 68521

• Cals birthday is 8/15/1958 and his social security number is 444-56-7777

• Evanns birthday is 12/16/1961 and her social security number is 655-77-8889

• Chases birthday is 5/28/1996 and his social security number is 576-20-2879

• Alexiss birthday is 5/1/1998 and her social security number is 575-29-2143

• Beckys birthday is 5/15/2004 and his social security number is 643-92-4685

• The Malecs do not have a foreign bank account or trusts

  2) Evann is a lecturer at the University of Nebraska in Lincoln, where she earned $60,000. The university withheld federal income tax of $6,425, state income tax of $2,550, Social Security tax of $3,720, and Medicare tax of $870. She also worked part time for Spreetail. Spreetail paid her $10,000 in salary, and withheld federal income tax of $1,124, state income tax of $425, Social Security tax of $620, and Medicare tax of $145.

  3) The Malecs received $800 of interest from Wells Fargo on a joint account. They received $900 interest on the City of New York bonds they purchased in January with the proceeds from a loan from Union Bank. They paid interest of $1,100 on the loan. Cal received a dividend of $640 on Walmart, Inc. stock he owns. Evann received a dividend of $1,580 on Facebook, Inc. stock she owns. Cal and Evann received a dividend of $865 on jointly owned stock in Target, Inc. All of these dividends are qualified dividends.

  4) The Malecs have qualified educational loan interest expense of $2,800 in 2018.