The following is information to prepare a federal income tax return for 2021. Forms are available at www.irs.gov under Forms and Publications. Forms which have a different number (8949, etc.) should be searched individually.

Richard K. and Kate L. Castle have been married 18 years. Richard is 52 years old (SSN 433-45-6789) while Kate is 47 years old (SSN 433-45-6788). They live at 1234 Elm Drive, Indianapolis, Indiana 46202. The couple uses the cash method of accounting and files their return on a calendar-year basis. They are tired of politics and do not want to contribute to the presidential election campaign.

They have 2 children: Kevin W. Castle (SSN 111-33-4444, DOB 12/1/2004) and Alexis A. Castle (SSN 111-33-4445, DOB 01/04/2008). Both children live with them the entire year. Kevin is a full-time student. Alexis is considered legally blind.

Richard is a salesman employed by DSK Industries. This year he earned $144,500. Federal and state income taxes withheld were $18,207 and $7,514 respectively. Social Security tax withheld was $8,853.60 and Medicare tax withheld was $2,095.25.

Kate recently completed a graduate degree in computer technology. She freelances as an independent contractor in computer graphics. She uses her own name as the name of her business. Her earnings received from various engagements were $16,000. Her only expenses paid during the year were for miscellaneous office supplies of $5,000. She paid estimated federal taxes during the year of $1,200 ($300 on each due date). Her business uses the cash method of accounting. The Activity Code for her business is 541400.

Other income earned by the couple included interest income of $4,500 from a certificate of deposit issued by Highland National Bank and $1,000 of interest from tax-exempt bonds issued by the State of Indiana.

The couple has adequate health insurance coverage for the entire year.

They have no foreign accounts and have had no virtual currency transactions.

They are not required to issue Form 1099s to anyone for any of their activities.

They received one (1) economic stimulus payments during the year in the amount of $5,600

The couple owns a duplex that it rents out. It was rented out for the entire year in 2021. This activity is not a qualified trade or business for QBI purposes. It is located at 111 Nowhere Ave., Indianapolis, Indiana. Their rental records reveal active participation and the following information for the year:

Rental income	$12,000
Rental Expenses
Insurance	400
Mortgage interest	8,000
Repairs	1,000
Property Taxes	600
Depreciation	1,500

Kate went through their financial records and found the following payments during the year:

Prescription medicines and drugs	982
Medical insurance premiums	2,830
Doctors and hospital bills (net of reimbursements)	1,535
Contac lenses for Kevin	218
Real estate taxes paid on home	3,400
Sales taxes paid on new car	1,485
Ad valorem taxes paid on family cars	350
Home mortgage interest	9,250
Credit card interest	480
Interest on personal car loan	1,720
Cash contributions to:
United Methodist Church	5,200
Salvation Army	1,500
Obama Bush Presidential Campaign Fund	250
Unreimbursed employee business expenses Richard	470

You will need the following forms and schedules: Form 1040, Schedules 1, 2, A, B, C, E, and SE, Form 8995, Form 8812.

You are to prepare the 2021 Form 1040 and related schedules IN GOOD FORM.