with all the information provided, please do schedule 5!
Note: This problem is for the 2018 tax year. David R. and Ella M. Cole (ages 39 and 38, respectively) are husband and wife who live at 1820 Elk Avenue, Denver, CO 80202. David is a self-employed consultant specializing in retail management, and Ella is a dental hygienist for a chain of dental clinics. David camned consulting fees of S145.000 in 2018. He maintains his own office and pays for all business expenses. The Coles are adequately covered by the medical plan provided by Ella's employer but have chosen not to participate in its $ 401(k) retirement plan David's cmployment-related expenses for 2018 are summarized below. Airfare SKOD Lodging 5.000 Meals (during travel status) 4.800 Entertainment 3,600 Ground transportation (c.g. limos, rental cars, and taxis) 800 Business gifts Office supplies (includes postage, overnight delivery, and copying) 1.500 The entertainment involved taking clients to sporting and musical events. The business gifts consisted of $50 gift certificates to a national restaurant. These were sent by David during the Christmas holidays to 18 of his major clients. 900 In addition, David drove his 2016 Ford Expedition 11,000 miles for business and 3,000 for personal use during 2018. He purchased the Expedition on August 15, 2015, and has always used the automatic (standard) mileage method for tax purposes. Parking and tolls relating to business use total $340 in 2018 When the Coles purchased their present residence in April 2015, they devoted 450 of the 3,000 square feet of living space to an office for David. The property cost $440,000 ($40,000 of which is attributable to the land) and has since appreciated in value. Expenses relating to the residence in 2018 (except for mortgage interest and property taxes, see below) are as follows: Insurance $2,600 Repairs and maintenance 900 Utilities 4.700 Painting office area; area rugs and plants in the office) 1.800 *Treat as a direct office in home expense. In terms of depreciation, the Coles use the MACRS percentage tables applicable to 39-year nonresidential real property. As to depreciable property (e.g., office furniture), David tries to avoid capitalization and uses whatever method provides the fastest write-off for tax purposes. Ella works part-time as a substitute when a hygienist is ill or on vacation or when one of the clinics is particularly busy (eg. prior to the beginning of the school year). Assumed that Ella is an employee (not an independent contractor). Besides her transportation, she must provide and maintain her own uniforms. Her expenses for 2018 appear below. Uniforms $690 State and city occupational licenses Professional journals and membership ducs in the American Dental Hygiene Association 140 Correspondence study course (taken online) dealing with teeth whitening procedures 420 Ella's salary for the year is $42.000, and her Form W-2 for the year shows income tax withholdings of $5,000 (Federal) and S1,000 (state) and the proper amount of Social Security and Medicare taxes. 3D 800 510 200,000 . Besides the items already mentioned, the Coles had the following receipts during 2018, Interest income State of Colorado general purpose bonds $2,500 IBM bonds Wells Fargo Bank 1,200 $4,500 Federal income tax refund for year 2017 Life insurance proceeds paid by Eagle Assurance Corporation Inheritance of savings account from Sarah Cole 50,000 Sales proceeds from two ATVs 9,000 For several years, the Coles' household has included David's divorced mother, Sarah, who has been claimed as their dependent. In late December 2017, Sarah unexpectedly died of coronary arrest in her sleep. Unknown to Ella and David, Sarah had a life insurance policy and a savings account (with David as the designated beneficiary of each). In 2017, the Coles purchased two ATVs for S14,000. After several near mishaps, they decided that the sport was too dangerous. In 2018, they sold the ATVs to their neighbor. Additional expenditures for 2018 include: Funeral expenses for Sarah $4,500 Taxes Real property taxes on personal residence $6,400 Colorado state income tax due (paid in April 2018 for tax year 2017) 310 6,710 Mortgage interest on personal residence (Rocky Mountain Bank) 6,600 Paid church pledge 2,400 Contributions to traditional IRAs for Ella and David (S5,500 + $5,500) 11,000 In 2018, the Coles made quarterly estimated tax payments of $6,000 (Federal) and $500 (state) for a total of $24,000 (Federal) and $2,000 (state). Relevant Social Security numbers are: David Cole 123-45-6788 Ella Cole 123-45-6787 The Coles do not want to contribute to the Presidential Election Campaign Fund. Also, they want any overpayment of tax refunded to them and not applied toward next year's tax liability. David will have a self-employment tax liability Required: Using the appropriate forms and schedules, compute the Coles' Federal income tax for 2018. Disregard the alternative minimum tax (AMT) and the various education credits Make realistic assumptions about any missing data. Enter all amounts as positive numbers. If an amount box does not require an entry or the answer is zero, enter "0". If required, round all dollar amounts to the nearest dollar. It may be necessary to complete the tax schedules before completing Form 1040. Use the included tax rates schedules to compute the tax. When computing the tax liability, do not round your immediate calculations. If required, round your final answers to the nearest dollar. please do a form 1040 year 2018 please! of the amount over - 2018 Individual Tax Rate Schedules Single If taxable income is: But not over - over - The Tax is: $9.525 ........... 10% $9.525 $38.700 $952.50 +12% $38,700 $82.500 $4453.50 + 22% $82,500 $157,500 $14089.50 +24% $157,500 $200,000 $32089.50 + 32% $200.000 $500,000 $45689.50 + 35% $500.000 $150689.50 + 37% $0 of the amount over - SO $9.525 $38,700 $82.500 $157,500 $200.000 $500.000 Head of Household If taxable income is: But not over - over - SO $13.600 $13,600 $51.800 $51,800 $82.500 $82,500 $157,500 $157,500 $200,000 $200.000 $500.000 $500.000 The Tax is: ........... 10% $1360.00 + 12% $5944.00 + 22% $12698.00 +24% $30698.00 + 32% $44298.50 + 35% $149298.00 + 37% $13,600 $51,800 $82.500 $157,500 $200,000 $500.000 of the Over- $0 Married filing jointly / Qualifying widow(er) If taxable income is: But not over - over - The Tax is: $19.050 ....10% $19.050 $77,400 $1905.00 + 12% $77,400 $165,000 $8907.00 + 22% $165.000 $315.000 $28179.00 +24% $315,000 $400,000 $64179.00 + 32% $400.000 $600,000 $91379.00 + 35% $600,000 $161379.00 + 37% of the amount Over- $0 $19,050 $77,400 $165.000 $315.000 $400.000 $600,000 Married filing separately If taxable income is: But not over- over - $0 $9.525 $9.525 $38.700 $38.700 $82.500 $82.500 $157,500 $157,500 $200,000 $200.000 $300,000 $300,000 The Tax is: . .. 10% $952.50 +12% $4453.50 + 22% $14089.50 +24% $32089.50 + 32% $45689.50 + 35% $80689.50 + 37% $9.525 $38.700 $82.500 $157,500 $200,000 $300,000 SCHEDULE 5 (Form 1040) Other Payments and Refundable Credits Attach to Form 1040. Go to www.lrs.gov/Form 1040 for instructions and the latest information. OMB No. 1545-0074 2018 Attachment Department of the Treasury Internal Revenue Service Name(s) shown on Form 1040 Sequence No. 05 Your social security number 65 66 67a 67b 68 69 70 Other 65 Reserved.. . . . . . Pavmente 66 2018 estimated tax payments and amount applied from 2017 return 67a Reserved . . . . . . . . . . . . . . . . . . . . . . . and b Reserved . . . . . . . . . . . . . . . . . . . . . Refundable 68-69 Reserved. ...... Credits Net premium tax credit. Attach Form 8962... . Amount paid with request for extension to file (see instructions) , 72 Excess social security and tier 1 RRTA tax withheld . . . . . . . 73 Credit for federal tax on fuels. Attach Form 4136.. . Credits from Form: a 2439 b Reserved c 8885 do 75 Add the amounts in the far right column. These are your total other payments and refundable credits. Enter here and include on Form 1040, line 17 For Paperwork Reduction Act Notice, see your tax return instructions. Cat. No. 714820 70 71 Schedule 5 (Form 1040) 2018 Note: This problem is for the 2018 tax year. David R. and Ella M. Cole (ages 39 and 38, respectively) are husband and wife who live at 1820 Elk Avenue, Denver, CO 80202. David is a self-employed consultant specializing in retail management, and Ella is a dental hygienist for a chain of dental clinics. David camned consulting fees of S145.000 in 2018. He maintains his own office and pays for all business expenses. The Coles are adequately covered by the medical plan provided by Ella's employer but have chosen not to participate in its $ 401(k) retirement plan David's cmployment-related expenses for 2018 are summarized below. Airfare SKOD Lodging 5.000 Meals (during travel status) 4.800 Entertainment 3,600 Ground transportation (c.g. limos, rental cars, and taxis) 800 Business gifts Office supplies (includes postage, overnight delivery, and copying) 1.500 The entertainment involved taking clients to sporting and musical events. The business gifts consisted of $50 gift certificates to a national restaurant. These were sent by David during the Christmas holidays to 18 of his major clients. 900 In addition, David drove his 2016 Ford Expedition 11,000 miles for business and 3,000 for personal use during 2018. He purchased the Expedition on August 15, 2015, and has always used the automatic (standard) mileage method for tax purposes. Parking and tolls relating to business use total $340 in 2018 When the Coles purchased their present residence in April 2015, they devoted 450 of the 3,000 square feet of living space to an office for David. The property cost $440,000 ($40,000 of which is attributable to the land) and has since appreciated in value. Expenses relating to the residence in 2018 (except for mortgage interest and property taxes, see below) are as follows: Insurance $2,600 Repairs and maintenance 900 Utilities 4.700 Painting office area; area rugs and plants in the office) 1.800 *Treat as a direct office in home expense. In terms of depreciation, the Coles use the MACRS percentage tables applicable to 39-year nonresidential real property. As to depreciable property (e.g., office furniture), David tries to avoid capitalization and uses whatever method provides the fastest write-off for tax purposes. Ella works part-time as a substitute when a hygienist is ill or on vacation or when one of the clinics is particularly busy (eg. prior to the beginning of the school year). Assumed that Ella is an employee (not an independent contractor). Besides her transportation, she must provide and maintain her own uniforms. Her expenses for 2018 appear below. Uniforms $690 State and city occupational licenses Professional journals and membership ducs in the American Dental Hygiene Association 140 Correspondence study course (taken online) dealing with teeth whitening procedures 420 Ella's salary for the year is $42.000, and her Form W-2 for the year shows income tax withholdings of $5,000 (Federal) and S1,000 (state) and the proper amount of Social Security and Medicare taxes. 3D 800 510 200,000 . Besides the items already mentioned, the Coles had the following receipts during 2018, Interest income State of Colorado general purpose bonds $2,500 IBM bonds Wells Fargo Bank 1,200 $4,500 Federal income tax refund for year 2017 Life insurance proceeds paid by Eagle Assurance Corporation Inheritance of savings account from Sarah Cole 50,000 Sales proceeds from two ATVs 9,000 For several years, the Coles' household has included David's divorced mother, Sarah, who has been claimed as their dependent. In late December 2017, Sarah unexpectedly died of coronary arrest in her sleep. Unknown to Ella and David, Sarah had a life insurance policy and a savings account (with David as the designated beneficiary of each). In 2017, the Coles purchased two ATVs for S14,000. After several near mishaps, they decided that the sport was too dangerous. In 2018, they sold the ATVs to their neighbor. Additional expenditures for 2018 include: Funeral expenses for Sarah $4,500 Taxes Real property taxes on personal residence $6,400 Colorado state income tax due (paid in April 2018 for tax year 2017) 310 6,710 Mortgage interest on personal residence (Rocky Mountain Bank) 6,600 Paid church pledge 2,400 Contributions to traditional IRAs for Ella and David (S5,500 + $5,500) 11,000 In 2018, the Coles made quarterly estimated tax payments of $6,000 (Federal) and $500 (state) for a total of $24,000 (Federal) and $2,000 (state). Relevant Social Security numbers are: David Cole 123-45-6788 Ella Cole 123-45-6787 The Coles do not want to contribute to the Presidential Election Campaign Fund. Also, they want any overpayment of tax refunded to them and not applied toward next year's tax liability. David will have a self-employment tax liability Required: Using the appropriate forms and schedules, compute the Coles' Federal income tax for 2018. Disregard the alternative minimum tax (AMT) and the various education credits Make realistic assumptions about any missing data. Enter all amounts as positive numbers. If an amount box does not require an entry or the answer is zero, enter "0". If required, round all dollar amounts to the nearest dollar. It may be necessary to complete the tax schedules before completing Form 1040. Use the included tax rates schedules to compute the tax. When computing the tax liability, do not round your immediate calculations. If required, round your final answers to the nearest dollar. please do a form 1040 year 2018 please! of the amount over - 2018 Individual Tax Rate Schedules Single If taxable income is: But not over - over - The Tax is: $9.525 ........... 10% $9.525 $38.700 $952.50 +12% $38,700 $82.500 $4453.50 + 22% $82,500 $157,500 $14089.50 +24% $157,500 $200,000 $32089.50 + 32% $200.000 $500,000 $45689.50 + 35% $500.000 $150689.50 + 37% $0 of the amount over - SO $9.525 $38,700 $82.500 $157,500 $200.000 $500.000 Head of Household If taxable income is: But not over - over - SO $13.600 $13,600 $51.800 $51,800 $82.500 $82,500 $157,500 $157,500 $200,000 $200.000 $500.000 $500.000 The Tax is: ........... 10% $1360.00 + 12% $5944.00 + 22% $12698.00 +24% $30698.00 + 32% $44298.50 + 35% $149298.00 + 37% $13,600 $51,800 $82.500 $157,500 $200,000 $500.000 of the Over- $0 Married filing jointly / Qualifying widow(er) If taxable income is: But not over - over - The Tax is: $19.050 ....10% $19.050 $77,400 $1905.00 + 12% $77,400 $165,000 $8907.00 + 22% $165.000 $315.000 $28179.00 +24% $315,000 $400,000 $64179.00 + 32% $400.000 $600,000 $91379.00 + 35% $600,000 $161379.00 + 37% of the amount Over- $0 $19,050 $77,400 $165.000 $315.000 $400.000 $600,000 Married filing separately If taxable income is: But not over- over - $0 $9.525 $9.525 $38.700 $38.700 $82.500 $82.500 $157,500 $157,500 $200,000 $200.000 $300,000 $300,000 The Tax is: . .. 10% $952.50 +12% $4453.50 + 22% $14089.50 +24% $32089.50 + 32% $45689.50 + 35% $80689.50 + 37% $9.525 $38.700 $82.500 $157,500 $200,000 $300,000 SCHEDULE 5 (Form 1040) Other Payments and Refundable Credits Attach to Form 1040. Go to www.lrs.gov/Form 1040 for instructions and the latest information. OMB No. 1545-0074 2018 Attachment Department of the Treasury Internal Revenue Service Name(s) shown on Form 1040 Sequence No. 05 Your social security number 65 66 67a 67b 68 69 70 Other 65 Reserved.. . . . . . Pavmente 66 2018 estimated tax payments and amount applied from 2017 return 67a Reserved . . . . . . . . . . . . . . . . . . . . . . . and b Reserved . . . . . . . . . . . . . . . . . . . . . Refundable 68-69 Reserved. ...... Credits Net premium tax credit. Attach Form 8962... . Amount paid with request for extension to file (see instructions) , 72 Excess social security and tier 1 RRTA tax withheld . . . . . . . 73 Credit for federal tax on fuels. Attach Form 4136.. . Credits from Form: a 2439 b Reserved c 8885 do 75 Add the amounts in the far right column. These are your total other payments and refundable credits. Enter here and include on Form 1040, line 17 For Paperwork Reduction Act Notice, see your tax return instructions. Cat. No. 714820 70 71 Schedule 5 (Form 1040) 2018
