Taxation is 2020

7 18944) d. *575 Dan M. and Cheryl A. Peters are married, file a joint return, and have no children. Dan, age 45, is an independent contractor working in pharmaceutical sales and Cheryl, age 42, is a nurse at a local hospital . Dan's SSN is 400-20-0000 and Cheryl's SSN is 200-40 0000 and they reside ar 2033 Palmetto Drive, Adlanta, GA 30304. Dan is paid according to commissions from sales, and he has no income tax or payroll tax withholdings. Dan operates his business from his home office. During 2020, Dan earned total commissions in his business of $125,000. Cheryl by cared a salary during 2020 of $45,400, with the following withholdings: $6,000 federal taxes, $1,800 state taxes, $2,815 OASDI (Social Security), and $658 Medicare taxes. During 2020, Dan and Cheryl had interest income from corporate bonds and bank ac. 1040 bach counts of $1,450 and qualified dividends from stocks of $5.950. Dan also actively trades stocks and had the following results for 2020: Schals Date Acquired Date Sold Proceeds Cost Gain or Loss Stocks 7/1/2015 12/1/2020 $10,900 $6,000 $4,900 Long-term Stocks 7/1/2018 12/1/2020 $6,000 $9.200 (53,200) Long-term Stocks 7/1/2020 10/30/2020 $4,000 $11,800 ($7,800) Short-term He had no capital loss carryovers from previous years. Basis for the stocks were re- ported to the IRS by the brokerage firm. Dan does a considerable amount of travel in connection with his business and uses his own car. During 2020, Dan drove his car a total of 38,000 miles, of which 32,000 were business related. He also had business-related parking fees and tolls during the year of $280. Dan uses the mileage method for deducting auto expenses. Dan also had the follow- ing travel expenses while away from home during the year: Hotel $4,200 Meals 820X 50%. Entertainment of customers 1,080 Tips 100 Laundry and cleaning 150 Total $6,350 Dan uses the simplified method to deduct expenses for his office-in-home. His office measures 15 feet by i 2 feet in size. Cheryl incurred several expenses in connection with her nursing job. She paid $450 in professional dues, $200 in professional journals, and $350 for uniforms. Dan and Cheryl had the following other expenditures during the year: Health insurance premiums (after-tax) Doctor bills 470 A Real estate taxes on home / pro tax 6,800 A Personal property taxes 1,400 A Mortgage interest-all deductible Charitable contributions-cash 9,000 A Charitable contributions--Apple stock owned for 5 years: Gt 6 month for 2000 dec FMV $8.000 488283 Adjusted basis 2,000 Tax preparation fees ($250 allocated to Dan's business) Lyc 250 * Paid by Dan in connection with his business Ploto back During 2020, Dan and Cheryl paid federal and state estimated tax payments on a quarterly basis. Federal payments for the year amounted to $20,000. State estimated pay- ments for the year amounted to $2,200. Compute Dan and Cheryl's income tax liability for 2020. Disregard the alternative minimum tax but include the self-employment tax. $ 4,400 1040 7,400 A mm 2020 7-64 1040 Departo Telur U.S. Individual Income Tax Return OMSN 1545-0074 On- Filing Status Single Married filing Jointy Married fling separately (MFS) Head of household OH Qualifying widowie tow Check only you checked the MFS box, enter the name of your spouse. If you checked the HOH or GW box, enter the child's name the qualing one box person is a child but not your dependent Your frst name and middle Last name Your social security ber If joint return, spouse's first name and middle Laste Soon's social security number More Home addros rumber and stro. If you have a P.O box seinstructions Acte Presidential Election Campaign Check here if you or your Oly, town, or poster you have a foreign address, completespaces below State Pode spouse fingity, want 53 to go to this fund. Checking a box below will not change Forsion country name Foreign provincest county Foreign postal code your taxonund You Spouse At any time during 2020, did you receive, sol, send, exchange or otherwise squire any francial interest in any virtual currency? Yes No Standard Someone can claim: You as a dependent Your spouse as a dependent Deduction Spouse itomizes on a separate return or you were a dual-status son Ago/Blindness You Were born before January 2, 1956 Are blind Spouse: Was bom before January 2.1956 Is blind Dependents se instructions Socialty Alationship que for the (1) First name Last name number to you Chi takon Chartered than four E dependents 900 instructions and check here 1 Wages, salaries, tips, ste. Attach Formis) W-2 1 Attach 2a Tac-exempt interest 2a Taxable interest 2b Schar Ja Qualled dividends required b Ordinary dividends 35 IRA distributions 4a b Taxable amount 5a Pensions and annuities 5a b Taable amount 50 Standard Social security benefits 6a b Table amount 6b Deduction for 7 Capital gain or 058). Attach Schedule Dif required. If not required. check here 7 - Single or Married 8 Other income from Schedule 1. in 9 8 Se $12.00 9 Add lines 1, 2, 3, 4, 5, 6, 7, and 8. This is your total income 9 Manding 10 Adjustments to income: joy of Outlying a From Schedule 1, Ane 22 100 widow $24.00 b Charitable contributions if you take the standard deduction. See instructions 100 Hosser Add lines 10a and 10b. These are your total adjustments to income 10e household $18.650 11 Subtract line 10c from line 9. This is your adjusted gross income 11 you hackad 12 Standard deduction or itemized deductions from Schedulo A) 12 anyok Standard 13 Qualified business income deduction. Attach Form 3095 or Form 1996-A 13 Deduction ses 14 Add lines 12 and 13 15 Taxable income. Subtract line 14 from line 11. zero or less enter-- 15 For Disclosure Privacy Act, and Paperwork Reduction Act Notice se separate instruction C113008 10400 4a - - AA 29 Form 1040 22020 16 Tax (se instructions. Check if any from Forms: 18814 24972 30 17 Amount from Schedule 2, line 3 18 Add lines 16 and 17. 19 Child tax credit or credit for other dependents 20 Amount from Schedule 3, line 7 21 Add Enes 19 and 20 22 Subtract line 21 from ine 18. zero or less, enter -- 23 Other taxes, including self-employment tax, from Schedule 2 line 10 24 Add lines 22 and 23. This is your total tax 25 Federal income tax withheld from a Forms W-2 250 b Form1090 25b e Other forms see instructions 250 d Add lines 25a rough 250 250 26 you have a 2020 estimated tax payments and amount applied from 2019 rebum. 26 qually had 27 Eamed Income credit (EIC) anach SchE 27 you have Additional child tax credit. Attach Schedule 6812 28 nonta combay American opportunity credit from Form 803, Ine 8 Section 30 Recovery rebate credit. See Instructions 30 Amount from Schedule 3 line 13 31 Add lines 27 through 31. These are your total other payments and refundable credits 32 Add lines 25, 26, and 32. These are your total payments 33 Refund 34 line 33 is more than line 24, subtractine 24 from line 33. This is the amount you overpaid 34 350 Amount of line 34 you want refunded to you. Forms is attached, check here D 35 Orect cost Routing number Type: Checking Savings See instructions Account number 36 Amount of line 34 you want applied to your 2021 estimated tax 38 Amount 37 Subtract line 33 from le 24. This is the amount you owe now 37 You Owe Note: Schedule and Schedule SF fiers, line 37 may not represent all of the taxes you one for Fordon 2020. See Schedule 3, line 120, and its instructions for details hoe to pay, Instruction Estimated tax penalty instructions) 30 Third Party Do you want to slow mother person to do this retum with the RSS Designee instructions Yes. Complete below. No De Prona Personation Sign Under perle el perry declare that I am reminds mu domovedules and statements. The best of my rowiedge and best they are correct and complete. Declaration of prepare the bed on to which prepare y Here Your grue Da | Perceipalan ostech Jansen? See on Spouse's return, both must in Date Section wart your en Keep a copy for ny your records Pronto En Preuersama PTN Di Preparare Check Paid Preparer Fim's ne Phone Use Only F's andres FEN 10400 Go to www.is govom fornection and the latest information 28 285888