Tax return project:

Instructions: Each of the following situations involves individuals who have asked you to prepare their tax returns. To complete the following, you must use actual 2016 tax forms. IRS- approved computer tax forms are acceptable.

You must choose the proper tax forms to prepare the returns, including any backup schedules, as necessary. For example, if a taxpayer has business income, you must file a Schedule C and any related schedules. Handle this tax return preparation as if you were to mail the completed forms to the IRS.

II. William J. and Amy T. Murray are married and live at 20 Merrimack Street in bath, Maine (04530). Their social security numbers are 156-91-5855 and 120-36-1854.

William earned $44,000 during the year, as a toll booth taker. Amy earned $58,000 as a nurse. They also earned $10,800 from renting the upstairs apartment to their home (constitutes of total square footage of the house) which Amy purchased years ago (legally hers). Other sources of income include: $200 from Residents Bank in savings account interest (his), and $315 in interest from her certificate of deposit with the first National Bank of Winooski.

During the year, the Murray incurred several costs for their house:

Homeowners insurance $1,000

Mortgage Interest $8,200

Real Estate Taxes $6,000

Water Bills 500

House painting $2,200

Depreciation house (The House was placed in service in 9/1/04, Cost, $250,000)

Driveway replacement $7,000 (Paved 7/1/07 Tenants are allowed to use it.)

The Murray are not sure how to handle two items from their rental property:

Security deposit received in 2016 and to be used against final months rent, $900.

The tenants paid rent in advance in December. The rent was due in January, 2017, $1,100.

There were several others costs incurred by the Murrays in 2016:

William paid $6,000 in alimony to his ex-wife, Hillary Trump (116-89-9190).

Although they paid $2,200 in medical insurance premium, $600 was also spent on dental bills for their son and $3,000 was spent on hospital costs for William.

The Murrays each had an IRA and contributed $5,500 to them. Only Amy is covered by her companys retirement plan.

They paid $400 in interest in student loans.

William donated $800 to their local church, while Amy donated $1,200 to Planned Parenthood.

They spent $350 to pay you to prepare their 2015 income tax returns, on March 19, 2016.

William also cuts lawns in his spare time. Some relevant data:

Gas & oil $2,500

Grass seed purchased $300

Cash Collected from customers $14,000

Trimmer Supplies $100

Power mower (purchased 5/1/15) $1,200

Their W-2 forms showed $4,815 in federal income taxes was withheld for William and $16,183 for Amy. The forms also showed that $1,560 was withheld in state income taxes from bills income, while $2,150 was withheld from Amy. Their son, Eddie, 5, is fully supported by them and lives with them. His social security number is 508-40-2550.