[The following information applies to the questions displayed below.] Read the following letter and help Shady Slim with his tex situation. Please assume that his gross income is $172,900 (which consists only of salary) for purposes of this problem. December 31, 2019 To the friendly student tax preparer: Hi, it's Shady Slim again. I just got back from my 55th birthday party, and I'm told that you need some more information from me in order to complete my tax return. I'm an open book! I'll tell you whatever I think you need to know. Let me tell you a few more things about my life. As you may recall, I am divorced from my wife, Alice. I know that it's unusual, but I have custody of my son, Shady, Jr. The judge owed me a few favors and I really love the kid. He lives with me full-time and my wife gets him every other weekend. I pay the vast majority of my son's expenses. I think Alice should have to pay some child support, but she doesn't have to pay a dime. The judge didn't owe me that much, I guess. I had to move this year after getting my job at Roca Cola. We moved on February 3 of this year, and I worked myjob st Roca Cola for the rest of the year. I still live in the same state, but I moved 500 miles away from my old house. I hired a moving company to move our stuff at a cost of $2,300, and I drove Junior in my car. Junior and I got a hotel room along the way that cost us $65 (I love Super 8!). Can you believe I'm still paying off my student loons, even after 15 years? I paid a total of $900 in interest on my old student loans this year. Remember when I told you about that guy that hit me with his car? I had a bunch of medical expenses that were not reimbursed by the lawsuit or by my insurance. Iincurred a total of $20,000 in medical expenses, and I was only reimbursed for $11,000. Good thing I can write off medical expenses, right? I contributed a lot of money to charity this year (and have receipt documentation for all contributions). I'm such a nice guy! I gave $1,000 in cash to the March of Dimes. I contributed some of my old furniture to the church. It was some good stuff! contributed a red velvet couch and my old recliner. The furniture is considered vintage and is worth $5,000 today (the appraiser surprised me!), even though I only paid $1,000 for it back in the day. When I contributed the furniture, the pastor said he didn't like the fabric and was going to sell the furniture to pay for some more pews in the church. Oh well, some people just have no taste, right? Roca Cola had a charity drive for the United Way this year and I contributed $90. Turns out, I don't even miss it, because Roca Cola takes it right off my paycheck every month ... $15 a month starting in July. My pay stub verifies thet i contributed the $90 to the United Way. Oh, one other bit of charity from me this year. An old buddy of mine was down on his luck. He lost his job and his house. I gave him $500 to help him out. I paid a lot of money in interest this year. I paid a total of $950 in personal credit card interest. I also paid $18,000 in interest on my $500,000 home mortgage that helped me buy my dream home. I also paid $2,000 in real estate taxes for my new house. A few other things I want to tell you about this year. Someone broke into my house and stole my kid's brand new bicycle and my set of golf clubs. The total loss from theft was $900. I paid $125 in union dues this year. I had to pay $1,200 for new suits for my job. Roca Cols requires its managers to wear suits every day on the job. I spent a total of $1,300 to pay for ges to commute to my job this year. Oh, this is pretty cool. I've always wanted to be a firefighter. I spent $1.400 in tuition to go to the local firefighter's school. I did this because someone told me that I can deduct the tuition as an itemized deduction, so the money would be coming back to me. That should be all the information you need right now. Please calculate my taxable income and complete pages 1 and 2 of Form 1040 (through texable income, line 10) and Schedule A. You're still doing this for free, right? Calculate the taxable income. Answer is complete and correct. > IS IS 172.900 172.900 Gross income AGI Itemized Deductions: Charitable Contributions > 2.090 0 Mortgage Interest Real Estate Taxes Taxable income 18.000 2,000 0 (22.090) 150.810 IS Answer is not complete. 1040 for a single taxpayer with one dependent. 1040 PG 1 1040 PG 2 Schedule A Page 2 of Form 1040. Page 2 172.900 1 172.900 172.900 22.090 150,810 Fam 1040 (2018) 1 Wages, salaries, tips, etc. Altach Forms) W-2 Altach Form(s) 2a Tax-exempt interest 20 b Taxable interest W 2. Also attach Ordinary 3. Oualified dividends dividends Form(s) W-2G and 1099-R if tax LIRAS, pensions, and annuities 4b Tacable amount was withheld. 5 Social security benefits Taxable amount 5b Total income. Add lines 1 through 5. Add any amount from Schedule 1. line 22 6 Standard deduction for 7 Adjusted gross income. If you have no adjustments to income, enter the amount from line 6; otherwise, subtract Schedule 1. Single or Married Ine 36, from line 6 7 ting separately $12.000 8 Standard deduction or tomized deductions (from Schedule A) 9 Qualified business income deduction (see instructions 10 Taxable income. Subtractines 8 and 9 from line 7. If zero ar loss, enter-O- 10 Married fing jointly or Quilling 11 a Tax 90 int.) check if any from: 1. Forms) 8814 2. Form 4972 widower) 524.000 3. b Add any amount from Schedule and check here 11 12 a Chid tax credit credit for other Head of dependents household $18.000 b Add any amount from Schedule and check here 12 13 Subtract line 12 from line 11. If zero or less enter-O- 13 14 Other taxes. Atach Schedule 4 14 If you checked 15 Total tax. Add lines 13 and 14 15 any box under 16 Standard deduction 16 Federal income tax withheld from Forms W-2 and 1099 see instructions 17 Roundable a EIC (int.) b Sch. B812 Form BAGS dAdd any amount from Schedule 5 17 18 Add Ines 16 and 17. These are your total payments 18 Refund 19 If ine 18 is more than line 15, subtract line 15 from ine 18. This is the amount you overpaid 19 20a Amount of line 19 you want rounded to you. If Form 8888s attached, check here 200 Roulding Fc Type: Checking Savings Direct deposit? See number Instructions d Account number 21 Amount of line 19 you want applied to your 2019 estimated tax 21 Amount You 22 Amount you owe. Subtractine 18 from Ine 15. For details on how to pay, see instructions Owe 23 Estimated tax penaly soratrictions) Go to www.irs.gow Form1040 for instructions and the latest information THIS FORM IBA SIMULATION OF AN OFFICIAL U.S. TAX FORM. IT IS NOT THE OFFICIAL FORM IT BELF. DO NOT USE THIS FORM FOR TAX FILINGS OR FOR ANY PURPOSE OTHER THAN EDUCATIONAL 2018 MoGraw-Hill Education Form 1040 (2018) 1040 PG 1 1040 PG 2 Schedule A Schedule A of Form 1040. Itemized Deductions OMB No. 1545-0074 SCHEDULE A (Form 1040) Department of the Treasury 2018 Go to www.is.gow Schedule for instructions and the latest information Attach to Form 1040 Caution. If you are claiming a not qualified disaster loss on Form 4584, see the instructions for line 16 Intemal Revenue Service (99) Attachment Sequence No. 07 Names shown on Form 1040 Your social security number 123-45-6789 Medical and Dental Expenses 9,000 17,290 0 Taxes You Pald Caution. Do not include expenses reimbursed or paid by others 1 Medical and dental expenses instructions) 2 Enter amount from Form 1040, line 7 172.900 3 Multiply line 2 by 10% (0.10) 4 Subtract line 3 from line 1. I line 3 is more than line 1, enter-O- 5 State and local taxes a State and local income taxes or general sales taxes. You may include either income taxes or general sales taxes on line 5a, but not both. you clect to include general sales taxes instead of income taxes, check this box b State and local real estate as (see instructions) State and local personal property taxes d Add lines Se through Enter the smaller of line 5d and $10,000 (55,000 if married fling separately 6 Others List type and amount Sa 2.000 Sb 50 2,000 50 6 7 Add lines 5e and 2.000 Interest You 8 Home mortgage interest and points. If you didn't use all of your home Pald mortgage loans) to buy, build or improve your home, see instructions and Caution: check this box a Home mortgage interest and points reported to you on Form 1098 18.000 Your mortgage Home mortgage interest not reported to you on Form 1098. I paid to interest deduction may be limited person from whom you bought the home, soe instructions and show se instructions) person's name, identlying no and address Sb Points not reported to you on Form 1098. Son instructions for speciales Bc d Reserved ed Add lines Bathrough Se 9 Investment interest. Altach Form 4962 required. see instructions) 10 Add lines and 10 18,000 Gifts to Charity 11 Gints by cash or check. If you made any gift of $250 or more, see instructions 11 2.090 12 Other than by cash or check. Iany git of $250 or more, son If you made agit instructions. You must attach Form 8283 over $500 12 and got a bent 13 Carryover from prior year 13 for it, instructions 14 Add lines 11 through 13 2,090 Casualty and 15 Casualty and theft losses from a federally declared disaster (other than not qualified disaster losses). Attach Form Theft Losses and enter the amount from line 18 of that fom. See instructions 15 Other itemized 16 Other-from list in instructions, Lype and amount Deductions 16 17 17 Add the amounts in the far right column for lines through 16. Also, enter this amount on Form 1040, Ine 8 22.090 Total itemized Deductions 18 If you loc totam deductions even though they are less than your standard deduction, check here For Paperwork Reduction Act Notice, cae the instruction for Form 1040 Cat. No. 17145C Schedule A Form 1040) 2013 THIB FORM 18 A SIMULATION OF AN OFFICIAL U.B. TAX FORM. IT IS NOT THE OFFICIAL FORM ITSELF. DO NOT USE THIB FORM FOR TAX FILINGS OR FOR ANY PURPOSE OTHER THAN EDUCATIONAL 2018 Mo Graw-Hill Education [The following information applies to the questions displayed below.] Read the following letter and help Shady Slim with his tex situation. Please assume that his gross income is $172,900 (which consists only of salary) for purposes of this problem. December 31, 2019 To the friendly student tax preparer: Hi, it's Shady Slim again. I just got back from my 55th birthday party, and I'm told that you need some more information from me in order to complete my tax return. I'm an open book! I'll tell you whatever I think you need to know. Let me tell you a few more things about my life. As you may recall, I am divorced from my wife, Alice. I know that it's unusual, but I have custody of my son, Shady, Jr. The judge owed me a few favors and I really love the kid. He lives with me full-time and my wife gets him every other weekend. I pay the vast majority of my son's expenses. I think Alice should have to pay some child support, but she doesn't have to pay a dime. The judge didn't owe me that much, I guess. I had to move this year after getting my job at Roca Cola. We moved on February 3 of this year, and I worked myjob st Roca Cola for the rest of the year. I still live in the same state, but I moved 500 miles away from my old house. I hired a moving company to move our stuff at a cost of $2,300, and I drove Junior in my car. Junior and I got a hotel room along the way that cost us $65 (I love Super 8!). Can you believe I'm still paying off my student loons, even after 15 years? I paid a total of $900 in interest on my old student loans this year. Remember when I told you about that guy that hit me with his car? I had a bunch of medical expenses that were not reimbursed by the lawsuit or by my insurance. Iincurred a total of $20,000 in medical expenses, and I was only reimbursed for $11,000. Good thing I can write off medical expenses, right? I contributed a lot of money to charity this year (and have receipt documentation for all contributions). I'm such a nice guy! I gave $1,000 in cash to the March of Dimes. I contributed some of my old furniture to the church. It was some good stuff! contributed a red velvet couch and my old recliner. The furniture is considered vintage and is worth $5,000 today (the appraiser surprised me!), even though I only paid $1,000 for it back in the day. When I contributed the furniture, the pastor said he didn't like the fabric and was going to sell the furniture to pay for some more pews in the church. Oh well, some people just have no taste, right? Roca Cola had a charity drive for the United Way this year and I contributed $90. Turns out, I don't even miss it, because Roca Cola takes it right off my paycheck every month ... $15 a month starting in July. My pay stub verifies thet i contributed the $90 to the United Way. Oh, one other bit of charity from me this year. An old buddy of mine was down on his luck. He lost his job and his house. I gave him $500 to help him out. I paid a lot of money in interest this year. I paid a total of $950 in personal credit card interest. I also paid $18,000 in interest on my $500,000 home mortgage that helped me buy my dream home. I also paid $2,000 in real estate taxes for my new house. A few other things I want to tell you about this year. Someone broke into my house and stole my kid's brand new bicycle and my set of golf clubs. The total loss from theft was $900. I paid $125 in union dues this year. I had to pay $1,200 for new suits for my job. Roca Cols requires its managers to wear suits every day on the job. I spent a total of $1,300 to pay for ges to commute to my job this year. Oh, this is pretty cool. I've always wanted to be a firefighter. I spent $1.400 in tuition to go to the local firefighter's school. I did this because someone told me that I can deduct the tuition as an itemized deduction, so the money would be coming back to me. That should be all the information you need right now. Please calculate my taxable income and complete pages 1 and 2 of Form 1040 (through texable income, line 10) and Schedule A. You're still doing this for free, right? Calculate the taxable income. Answer is complete and correct. > IS IS 172.900 172.900 Gross income AGI Itemized Deductions: Charitable Contributions > 2.090 0 Mortgage Interest Real Estate Taxes Taxable income 18.000 2,000 0 (22.090) 150.810 IS Answer is not complete. 1040 for a single taxpayer with one dependent. 1040 PG 1 1040 PG 2 Schedule A Page 2 of Form 1040. Page 2 172.900 1 172.900 172.900 22.090 150,810 Fam 1040 (2018) 1 Wages, salaries, tips, etc. Altach Forms) W-2 Altach Form(s) 2a Tax-exempt interest 20 b Taxable interest W 2. Also attach Ordinary 3. Oualified dividends dividends Form(s) W-2G and 1099-R if tax LIRAS, pensions, and annuities 4b Tacable amount was withheld. 5 Social security benefits Taxable amount 5b Total income. Add lines 1 through 5. Add any amount from Schedule 1. line 22 6 Standard deduction for 7 Adjusted gross income. If you have no adjustments to income, enter the amount from line 6; otherwise, subtract Schedule 1. Single or Married Ine 36, from line 6 7 ting separately $12.000 8 Standard deduction or tomized deductions (from Schedule A) 9 Qualified business income deduction (see instructions 10 Taxable income. Subtractines 8 and 9 from line 7. If zero ar loss, enter-O- 10 Married fing jointly or Quilling 11 a Tax 90 int.) check if any from: 1. Forms) 8814 2. Form 4972 widower) 524.000 3. b Add any amount from Schedule and check here 11 12 a Chid tax credit credit for other Head of dependents household $18.000 b Add any amount from Schedule and check here 12 13 Subtract line 12 from line 11. If zero or less enter-O- 13 14 Other taxes. Atach Schedule 4 14 If you checked 15 Total tax. Add lines 13 and 14 15 any box under 16 Standard deduction 16 Federal income tax withheld from Forms W-2 and 1099 see instructions 17 Roundable a EIC (int.) b Sch. B812 Form BAGS dAdd any amount from Schedule 5 17 18 Add Ines 16 and 17. These are your total payments 18 Refund 19 If ine 18 is more than line 15, subtract line 15 from ine 18. This is the amount you overpaid 19 20a Amount of line 19 you want rounded to you. If Form 8888s attached, check here 200 Roulding Fc Type: Checking Savings Direct deposit? See number Instructions d Account number 21 Amount of line 19 you want applied to your 2019 estimated tax 21 Amount You 22 Amount you owe. Subtractine 18 from Ine 15. For details on how to pay, see instructions Owe 23 Estimated tax penaly soratrictions) Go to www.irs.gow Form1040 for instructions and the latest information THIS FORM IBA SIMULATION OF AN OFFICIAL U.S. TAX FORM. IT IS NOT THE OFFICIAL FORM IT BELF. DO NOT USE THIS FORM FOR TAX FILINGS OR FOR ANY PURPOSE OTHER THAN EDUCATIONAL 2018 MoGraw-Hill Education Form 1040 (2018) 1040 PG 1 1040 PG 2 Schedule A Schedule A of Form 1040. Itemized Deductions OMB No. 1545-0074 SCHEDULE A (Form 1040) Department of the Treasury 2018 Go to www.is.gow Schedule for instructions and the latest information Attach to Form 1040 Caution. If you are claiming a not qualified disaster loss on Form 4584, see the instructions for line 16 Intemal Revenue Service (99) Attachment Sequence No. 07 Names shown on Form 1040 Your social security number 123-45-6789 Medical and Dental Expenses 9,000 17,290 0 Taxes You Pald Caution. Do not include expenses reimbursed or paid by others 1 Medical and dental expenses instructions) 2 Enter amount from Form 1040, line 7 172.900 3 Multiply line 2 by 10% (0.10) 4 Subtract line 3 from line 1. I line 3 is more than line 1, enter-O- 5 State and local taxes a State and local income taxes or general sales taxes. You may include either income taxes or general sales taxes on line 5a, but not both. you clect to include general sales taxes instead of income taxes, check this box b State and local real estate as (see instructions) State and local personal property taxes d Add lines Se through Enter the smaller of line 5d and $10,000 (55,000 if married fling separately 6 Others List type and amount Sa 2.000 Sb 50 2,000 50 6 7 Add lines 5e and 2.000 Interest You 8 Home mortgage interest and points. If you didn't use all of your home Pald mortgage loans) to buy, build or improve your home, see instructions and Caution: check this box a Home mortgage interest and points reported to you on Form 1098 18.000 Your mortgage Home mortgage interest not reported to you on Form 1098. I paid to interest deduction may be limited person from whom you bought the home, soe instructions and show se instructions) person's name, identlying no and address Sb Points not reported to you on Form 1098. Son instructions for speciales Bc d Reserved ed Add lines Bathrough Se 9 Investment interest. Altach Form 4962 required. see instructions) 10 Add lines and 10 18,000 Gifts to Charity 11 Gints by cash or check. If you made any gift of $250 or more, see instructions 11 2.090 12 Other than by cash or check. Iany git of $250 or more, son If you made agit instructions. You must attach Form 8283 over $500 12 and got a bent 13 Carryover from prior year 13 for it, instructions 14 Add lines 11 through 13 2,090 Casualty and 15 Casualty and theft losses from a federally declared disaster (other than not qualified disaster losses). Attach Form Theft Losses and enter the amount from line 18 of that fom. See instructions 15 Other itemized 16 Other-from list in instructions, Lype and amount Deductions 16 17 17 Add the amounts in the far right column for lines through 16. Also, enter this amount on Form 1040, Ine 8 22.090 Total itemized Deductions 18 If you loc totam deductions even though they are less than your standard deduction, check here For Paperwork Reduction Act Notice, cae the instruction for Form 1040 Cat. No. 17145C Schedule A Form 1040) 2013 THIB FORM 18 A SIMULATION OF AN OFFICIAL U.B. TAX FORM. IT IS NOT THE OFFICIAL FORM ITSELF. DO NOT USE THIB FORM FOR TAX FILINGS OR FOR ANY PURPOSE OTHER THAN EDUCATIONAL 2018 Mo Graw-Hill Education