Question
Terry and Ashley have come to you for help filing their 2018 tax return. They are married on December 31, 2018 and are both age
Terry and Ashley have come to you for help filing their 2018 tax return. They are married on December 31, 2018 and are both age 40. They live with their three qualifying children, Nick, Betty, and Roger, who are 12, 14, and 17 years old, respectively.
They have made the following requests:
They wish to file a joint tax return.
If they overpaid their taxes this year, they would like to receive half as a refund and have half applied to next year's federal tax return.
Terry and Ashley have the following income items during 2018:
Terry's wages of $50,000
Terry's unemployment compensation of $5,000
Ashley's wages of $60,000
Interest from a city of Chicago bond of $2,000
Interest from a corporate bond of $3,000
Ordinary dividends of $2,000
Gift from Leonard's father of a new computer that cost $3,000
A $3,000 refund from the State of Illinois for income taxes paid in 2017
Terry and Ashley incurred the following expenses/losses during 2018:
Contributions of $5,500 to each of Terry and Ashley's traditional IRAs, i.e., $11,000 total (they are not covered by any other qualified retirement plans)
Qualified medical expenses of $9,000
Personal credit card interest expense of $8,000
Charitable contributions of $4,000
Ten $25 parking tickets totaling $250
Mortgage interest on primary residence of $8,000 (mortgage is $200,000)
Property taxes on the primary residence of $6,500
Illinois state and local income taxes paid of $5,500
Federal tax withholding on Terry and Ashley's W-2s of $10,000
They also provide you with the following information about their prior year return:
On their prior year federal tax return, they claimed itemized deductions.
Terry and Ashley elected to have $139 of their 2017 tax refund applied to 2018.
Deductions from AGI
Q1. What amount is reported on Schedule A Line 1 - medical expenses?Note: Enter whole numbers only. Do not enter a $ sign or a comma.
Q2. What amount is reported on Schedule A Line 2 - AGI?Note: Enter whole numbers only. Do not enter a $ sign or a comma.
Q3. What amount is reported on Schedule A Line 3 - medical deduction floor?Note: Enter whole numbers only. Do not enter a $ sign or a comma.
Q4. What amount is reported on Schedule A Line 4 - allowable medical deduction?Note: Enter whole numbers only. Do not enter a $ sign or a comma.
Q5. What amount is reported on Schedule A Line 5a - income taxes?Note: Enter whole numbers only. Do not enter a $ sign or a comma.
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