Question
Without Critical Thinking Assignments this week, this is your opportunity (and a requirement) to work on your Portfolio Project. Obtain the supporting information from your
Without Critical Thinking Assignments this week, this is your opportunity (and a requirement) to work on your Portfolio Project. Obtain the supporting information from your Portfolio Project option. You will also use the Schedule A template included under that same option. Show all calculations within the cells of the template. This means that you must use formulas and links so that the thought process can be examined. Make good use of comments to convey your thought process as well; no hard coding of solutions. Submit a single MS Excel file for grading.
ACT405 Portfolio Project Case 1
Comprehensive Tax Problem Option 1
Taxpayer Information
Name: John Washington
Address: 3450 Green St.
Miami, FL 54321
DOB: 5/5/1960
Filing Status: Married
SSN: 434-20-2020
Occupation: Engineer
Name: Debra Washington
Address: 3450 Green St.
Miami, FL 54321
DOB: 7/7/1962
Filing Status: Married
SSN: 411-21-4568
Occupation: Teacher
INCOME INFORMATION:
Wages and Compensation
The following information is taken from John Washingtons 2017 Form W-2 Wage and Tax Statement:
Box 1 Wages, tips, and other compensation | 80,000 |
Box 2 Federal Withholding | 12,500 |
Box 17 State Income Tax Withholding | 2,000 |
The following information is taken from Debra Washingtons 2017 Form W-2 Wage and Tax Statement:
Box 1 Wages, tips, and other compensation | 42,000 |
Box 2 Federal Withholding | 3,500 |
Box 17 State Income Tax Withholding | 750 |
Interest and Dividends
John had interest income from a savings account from Everest Bank of $500.00
Debra had dividend income of $550 from Blue Co. stock.
Capital Gains
John had the following stock transactions in 2017:
He sold 1,000 shares of Apex Co. for $ 12,000 on June 7, 2017, which he purchased on April 1, 2017 for 25,000
Rental Real Estate
The couple owns a rent house which he purchased on July 1, 2014. The income and expenses of the rental real estate unit are as follows:
Rental income $12,000
Property taxes $1,500
Depreciation $1,000
Repairs and Maintenance $750
Insurance $2,000
Other Transactions in 2017
1. Debra had educator expenses in 2017 of $450.00
2. John had gambling winnings of $1,000.
3. John was the beneficiary of his mothers life insurance policy.
His mother died in 2017 and he received $50,000 under this policy.
4. Debra paid $700 in student loan interest.
SCHEDULE A | OMB No. 1545-0074 | |||||||||||||||
(Form 1040) | Itemized Deductions | 2016 | ||||||||||||||
Department of the Treasury Internal Revenue Service (99) | Information about Schedule A and its separate instructions is at www.irs.gov/schedulea | Attachment | ||||||||||||||
Attach to Form 1040. | Sequence No. 07 | |||||||||||||||
Name(s) shown on Form1040 | Your social security number | |||||||||||||||
Medical and Dental Expenses | Caution. Do not include expenses reimbursed or paid by others. | |||||||||||||||
1 | Medical and dental expenses (see instructions)..... | 1 | ||||||||||||||
2 | Enter amount from Form 1040, line 38 | 2 | ||||||||||||||
3 | Multiply line 2 by 10% (.10). But if either you or your spouse was | |||||||||||||||
born before January 2, 1949, multiply line 2 by 7.5% (.075) instead | 3 | |||||||||||||||
4 | Subtract line 3 from line 1. If line 3 is more than line 1, enter -0-. . . . . . . . | 4 | ||||||||||||||
Taxes You Paid | 5 | State and local (check only one box): | ||||||||||||||
a Income tax or | } | . . . . . | . . | |||||||||||||
b General sales tax | 5 | |||||||||||||||
6 | Real estate taxes (see instructions) . . . . . . . . . | 6 | ||||||||||||||
7 | Personal Property taxes. | . . . . . . . . . . . | 7 | |||||||||||||
8 | Other taxes. List type and amount > | . | ||||||||||||||
8 | ||||||||||||||||
9 | Add lines 5 through 8 | 9 | ||||||||||||||
Interest You Paid Note. Your mortgage interest deduction may be limited (see instructions). | 10 | Home mortgage interest and points reported to you on Form 1098 | 10 | |||||||||||||
11 | Home mortgage interest not reported to you on Form 1098. If paid | |||||||||||||||
to the person from whom you bought the home, see instructions | ||||||||||||||||
and show that persons name, identifying no., and address | ||||||||||||||||
11 | ||||||||||||||||
12 | Points not reported to you on Form 1098. See instructions for | |||||||||||||||
special rules . . . . . . . . . . . . . . . . . . . . | 12 | |||||||||||||||
13 | Mortgage insurance premiums (see instructions) . . . . . | 13 | ||||||||||||||
14 | Investment interest. Attach Form 4952 if required. (See instructions.) | 14 | ||||||||||||||
15 | Add lines 10 through 14. . . . . . . . . . . . . . . . . . . . . . . . . . | 15 | ||||||||||||||
Gifts to | 16 | Gifts by cash or check. If you made any gift of $250 or more, | ||||||||||||||
Charity | see instructions. . . . . . . . . . . . . . . . | 16 | ||||||||||||||
if you made a | 17 | Other than by cash or check. If any gift of $250 or more, see | ||||||||||||||
gift and got a | instructions. You must attach Form 8283 if over $500 . . . | 17 | ||||||||||||||
benefits for it ., | 18 | Carryover from prior year . . . . . . . . . . . . | 18 | |||||||||||||
see instructions | 19 | Add lines 16 through 18. . . . . . . . . . . . . . . . . . . . . . . | 19 | |||||||||||||
Casualty and Theft Losses | 20 | Casualty or theft loss(es). Attach Form 4684. (See instructions.) . | . . . . . . . | 20 | ||||||||||||
Job Expenses and Certain Miscellaneous Deductions | ||||||||||||||||
21 | Unreimbursed employee expensesjob travel, union dues, | 21 | ||||||||||||||
ob education, etc. Attach Form 2106 or 2106-EZ if required. | 22 | |||||||||||||||
(see instructions) | ||||||||||||||||
22 | Tax preparation fees . . . . . . . . . . . . . | |||||||||||||||
23 | Other expensesinvestment, safe deposit box, etc. List type | |||||||||||||||
and amount | 23 | |||||||||||||||
24 | ||||||||||||||||
24 | Add lines 21 through 23 . . . . . . . . . . . . | |||||||||||||||
25 | Enter amount from Form 1040, line 38 | 25 | ||||||||||||||
26 | Multiply line 25 by 2% (.02). . . . . . . . . . . . . . . . | 26 | ||||||||||||||
27 | Subtract line 26 from line 24. If line 26 is more than line 24, enter -0-. . . . . . | 27 | ||||||||||||||
Other Miscellaneous Deductions | 28 | Otherfrom list in instructions. List type and amount | ||||||||||||||
28 | ||||||||||||||||
Total Itemized Deductions | 29 | Is Form 1040, line 38, over $150,000? | ||||||||||||||
No. Your deduction is not limited. Add the amounts in the far right column | } | |||||||||||||||
for lines 4 through 28. Also, enter this amount on Form 1040, line 40. | ||||||||||||||||
Yes. Your deduction may be limited. See the Itemized Deductions | . . | 29 | ||||||||||||||
Worksheet in the instructions to figure the amount to enter. | ||||||||||||||||
30 | If you elect to itemize deductions even though they are less than your standard | |||||||||||||||
deduction, check here . . . . . . . . . . . . . . . . | ||||||||||||||||
For Paperwork Reduction Act Notice, see Form 1040 instructions. Cat. No. 17145C | Schedule A (Form 1040) 2016 |
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