TAXATION PROBLEM

Choosing and preparing an individual tax form. use worksheets 3.1 and 3.2

Jon Fong graduated from college in 2014 and began work as a systems analyst in July of that year. He is preparing to file his income tax return for 2014 and has collected the financial information shown below for that calendar year.

Tuition, scholarships, grants $5750

Scholarship, room, board $1850

Salary $30,250

Interest Income $185

Deductible expenses, total $3,000

Income taxes withheld $2600

a. Prepare Jon's 2014 tax return, using $6200 standard deduction, a personal exemption of $3950 and the tax rates given in exhibit 3.3. Which tax form should Jon use and why?

b. Prepare Jon's 2014 tax return using the date in part A long with the following information:

IRA contribution $5000

Cash dividends recieved 150

Which tax form should he use in this case and why?