[The following information applies to the questions displayed below] Diana and Ryan Workman were married on January 1 of last year. Ryan has an eight-year-old son, Jorge, from his previous marriage. Diana works as a computer programmer at Datafile Incorporated (D) earning a salary of $103,000. Ryan is self- employed and runs a day care center. The Workmans reported the following financial information pertaining to their activities during the current year, a. Diana earned a $103,000 salary for the year. b. Diana borrowed $13,400 from DI to purchase a car. Di charged her 2 percent interest ($268) on the loan, which Diana paid on December 31. DI would have charged Diana $860 if interest had been calculated at the applicable federal interest rate. Assume that tax avoidance was not a motive for the loan. c. Ryan received $2,700 in alimony and $5,900 in child support payments from his former spouse. They divorced in 2016. d. Ryan won a $1,040 cash prize at his church-sponsored Bingo game. e. The Workmans received $1,200 of interest from corporate bonds and $950 of interest from a municipal bond. Ryan owned these bonds before he married Daina. f. The couple bought 78 shares of ABC Incorporated stock for $54 per share on July 2. The stock was worth $75 a share on December 31. The stock paid a dividend of $1 per share on December 1. g. Ryan's father passed away on April 14. He inherited cash of $64,000 from his father and his baseball card collection, valued at $3,400. As the beneficiary of his father's life insurance policy, Ryan also received $164,000. h. The couple spent a weekend in Atlantic City in November and came home with gross gambling winnings of $2,600. i. Diana received $3,200 cash for reaching 10 years of continuous service at DI. j. Diana was hit and injured by a drunk driver while crossing a street at a crosswalk. she was unable to work for a month. She received $8,800 from her disability insurance. DI paid the premiums for Diana, but it reported the amount of the premiums as compensation to Diana on her year-end W-2. k. The drunk driver who hit Diana in part (j) was required to pay her $3,400 medical costs, $2,900 for the emotional trauma she suffered from the accident, and $7,800 for punitive damages. 1. For meeting her performance goals this year, Diana was informed on December 27 that she would receive a $6,400 year-end bonus. DI (located in Houston, Texas) mailed Diana's bonus check from its payroll processing center (Tampa, Florida) on December 28. Diana didn't receive the check at home until January 2. m. Ryan is a 10 percent owner of MNO Incorporated, a Subchapter S corporation. The company reported ordinary business Income for the year of $120,000. Ryan acquired the MNO stock two years ago. n. Ryan's day care business collected $105,000 in revenues. In addition, customers owed him $10,000 at year-end. During the year, Ryan spent $12,500 for supplies, $8,500 for utilities, $29,000 for rent, and $1,200 for miscellaneous expenses. One customer gave him use of their vacation home for a week (worth $9,500) in exchange for Ryan allowing their child to attend the day care center free of charge. Ryan accounts for his business activities using the cash method of accounting. o. Diana's employer pays the couple's annual health insurance premiums of $12,500 for a qualified plan. Form 1040 Page 1. Form 1040 Department of the Treasury Ireemal Revenue Service (99) U.S. Individual Income Tax Return 2021 Mamed fing Filing Status Check only one box Single jointy If you checked the MFS a child but not your dependent Your first name and middle initial Ryan OMB No. 1545-0074 IRS Use Onity-Do not wete or staple in the space Qualifying widow(er)() Marned fling separately (MFS) Head of household (HOH) enter the name of your spouse. If you checked the HOH or OW box, enter the child's name the qualifying person is Last name Workman Last name Workman Apt. no. Your social security number 111-22-3333 Spouse's social security number 222-33-4444 Presidential Election Campaign joint retum, spouse's first name and middle initial Diana Home address (number and street). If you have a PO box, see instructions 19010 N.W. 135th Street Check here if you, or your spouse Cay, town, or post office. If you have a foreign address, also complete spaces below Miami, FL 33054 State ZIP code ing jointly, want 31 this fund Checking a box below will not change your tax or refund Foreign country name Foreign province/state/county Foreign postal code Someone can claim You as a dependent Spouse temires on a separate retum or you were a dual-status alien Were bom before January 2, 1957 Are blind At any time during 2021, did you receive, sell, send, exchange, or otherwise acquire any financial interest in any virtual currency? Standard Deduction Age/Blindness You You Spouse Yes No Your spouse as a dependent Spouse Was bom before January 2, 1957 blind Dependents (see instructions) (1) First name Last name If more than Jorge Workman four dependents see instructions and check here (2) Social security number (3) Relationship to you (4)if qualifies for see instructione Childr Credit for other dependents 333-44-5555 Son Wages, salaries, tips, etc. Attach Formis) W-2 1 Attach Sch. B required 34 Qualified dividends 4s IRA distributions Sa Pensions and annuities da Social security benetts 28 1b Taxable interest 26 1.200 38 1b Ordinary dividends 30 b Taxable amount 4b Sa b Taxable amount 56 Taxable amount 66 Standard Deduction for Single or Mamed Ming separately $12.500 Mamed Sing Qualifying $25,100 -Head household $18,000 7 Capital gain or Jose) Attach Schedule D if required. If not required, check Other income from Schedule 1, ne 10 9 Add lines 1, 2, 30, 40, 50, 60, 7 and 8. This is your total income 10 Adjustments to income from Schedule 126 11 Subead in 10 from line 9. This is your adjusted gross income 7 " 1,203 10 11 12a Standard deduction or itemized deductions (hom Schedule A) 12 If you chackad wy box under Standard Deduction see instructions Charitable contutions you take the standard deduction (it) Add ines 12 and 12 13 Qualified business income deduction from Form 5 or Form 8356-A 14 Add ines 12c and 13 15 Taxable income Subtract ine 14 bom ine 11. Ezero or less, enter For Disclosure, Privacy Act, and Paperwork Reduction Act Notice, see separate instructions 12b 120 13 14 15 Cal No 113208 Form 1040 (2021) THE FORE Form 1040 Schedule 1. SCHEDULE 1 (Form 1040) Department of the Treasury Internal Revenue Service Additional Income and Adjustments to Income Attach to Ferm 1040, 1040-SR, or 1040-NR. Go to www.irs.gov/Form 1040 for instructions and the latest information Ne) shown on Fm 1040 1040-5 or 1040- Diana and Ryan Workman Part! Additional Income OMB No. 1545-0074 2021 Atachment Sequence No. 01 111-22-3333 Alimony Date of original vonia or separation agreement ses nude 3 Business income or ) Auch Schedule C Other gaine wes) AFo477 Partial real eyes, partnerships 5 corporations thas, ac Aach S 2 2.700 December 31, 2016 Farm income or Doss) Alach Sched 7 Unemployment compensation " Other incom Net operating Caning " Cancelation of de k Foreign and income exclusion from Form 2505 M " . Table Heath Savings Account d Jury duty by P " 1040 N of renting such The rental raft but were property Olympic and Paralympic medes and USOC prize money ( Section 461) Der income Last type and amount " "P 4 12.000 . 7 11.440 10 26.141 Cannes rough Enter here and on Form 1040 1040- 1040 B Part II Adjustments to Income 11 " 12 Cartain penses of resets, performing arts, and bgment of Ata Fum 2106 12 13 mgs account deudach Fo 14 34 16 17 18 Panty . . Date 20 21 22 24 Oper af employment tax Attach Schedule E Jury typy je nation 17 18 The 21 22 23