You should prepare the return by hand. You will find the forms you need in the workbook. If you prefer using online, fillable forms, click on the links at the end of this case study to access the forms.

Taxpayer Information

Taxpayer name:	Bruce H. Harrison
Taxpayer SSN:	201-00-0045
Taxpayer DOB:	April 1, 1977
Taxpayer occupation:	Contractor
Spouse name:	Lois A. Harrison
Spouse SSN:	201-00-1451
Spouse DOB:	March 28, 1982
Spouse occupation:	Newscaster
Address:	1312 Locust Street
	Your City, YS XXXXX
Cell phone (T):	(XXX) 555-6336; Preferred: Anytime; FCC: Yes; OK to call
Cell phone (S):	(XXX) 555-6363; Anytime; FCC: Yes; OK to call
Taxpayer email:	bhharrison@net.net
Spouse email:	lharrison@net.net

Health Insurance Information
Did everyone in the household have health insurance in 2019?	Yes
Total months covered through a state exchange or federal marketplace:	0
Total months covered through an employer-sponsored plan:	12
Was a Form 1095-A issued?	No

Bruce and Lois Harrison are new clients. Last year, they prepared their own return using online software, but this year, they would like professional assistance. They are married and wish to file a joint tax return. Both of their SSNs are valid for work in the U.S. and were received before the original filing due date of their return (including extensions). Both are U.S. citizens. No one may claim them as dependents. Neither is a student. They both wish to designate $3 to the Presidential Election Campaign Fund. Neither is blind or disabled.

Bruce and Lois did not suffer any casualty losses during the current tax year. They did not receive, sell, send, exchange, or otherwise acquire any financial interest in any virtual currency. Neither Bruce nor Lois have a financial interest in or signature authority over a foreign account. They did not receive a distribution from, nor were they the grantors of or transferor to, a foreign trust. The IRS has not issued any Identity Protection ID Numbers for their return.

They did not receive a notice from the IRS or any state or local taxing authority within the last year. Neither Bruce nor Lois provide a drivers license or state identification.

Household Information

Bruce and Lois own their home. They have two children.

Dependent name:	Lyla B. Harrison
Dependent SSN:	201-00-2451
Dependent DOB:	July 12, 2014
Dependent relationship:	Daughter
Time in household:	12 months
Gross income:	$0
Support:	Does not provide over half of her own support
Dependent name:	Kevin E. Harrison
Dependent SSN:	201-00-2452
Dependent DOB:	October 15, 2016
Dependent relationship:	Son
Time in household:	12 months
Gross income:	$0
Support:	Does not provide over half of his own support

Lyla and Kevin lived with Bruce and Lois all year, and they did not have any income. Neither is married or disabled. They are both U.S. citizens. Lyla and Kevin have SSNs that are valid for work in the United States and were received before the due date for the return (including extensions). Bruce and Lois brought in copies of medical records for both children.

Adjustments

Lois contributed $2,500 to a traditional IRA during the year. She only has one IRA account, and the value of this account on December 31, 2019, was $13,097.85. All of her previous contributions were deductible. Lois has never taken a distribution from this or any other retirement account. Bruce is covered by an employer-sponsored retirement plan, but Lois is not.

Credits

Bruce and Lois paid Little Ones Learning Center $7,200 ($3,600 for each child) to care for Kevin and Lyla while they worked. The center's EIN is 09-2014501. It is located at 1521 West Plain Road, Your City, YS XXXXX. The phone number for the Center is (XXX) 555-0034. Bruce and Lois have documentation substantiating this expense.

Self-Employment Income

Lois has always been an avid reader, and during the year, she had an opportunity to lead a book club at a nearby community center. The community center paid Lois for this work. At the end of the year, they sent Lois a Form 1099-MISC reporting an amount for nonemployee compensation in box 7 of the form. This form is shown in the Information Documents section. The community center is within walking distance of the couple's home, so Lois did not have any vehicle or travel expenses. Her only business-related expense was for $225 in supplies.

For purposes of the qualified business income deduction (QBID), this is not a specified service trade or business (SSTB). Lois did not pay any qualified wages, nor does she have any qualified business property, or any losses or short-term gains from asset disposition.

Capital Assets

Bruce was unhappy with the performance of an investment he had made in 2017. He sold the shares of stock on November 7, 2019, for fear the stock would continue its downward trend. Information relating to this sale was reported on a Form 1099-B. This form is shown in the Information Documents section.

Itemized Deductions

Bruce and Lois want to itemize deductions if it will be more beneficial than taking the standard deduction. They bring a Form 1098 reporting mortgage interest and real estate taxes paid on their personal residence. This is shown in the Information Documents section. Bruce and Lois would prefer to take the state income tax deduction rather than the sales tax deduction. They also had the following potentially deductible items for 2019:

Item Amount Notes 2018 State balance due $582 Made this payment on April 10, 2019 Cash donation to Cancer Research Foundation $475 Paid March 4, 2019 a Employee's social security number XXX-XX-0045 D Employer identification number EIN) 09-2014502 c Employer's name, address, and ZIP code ELM CONSTRUCTION AGENCY 6 GREENWOOD LANE YOUR CITY, YS XXXXX Safe, accurate, Visit the IRS website at OMB No 1545-0008 FAST! Use irse , file www.rs govtatile 1 Wages, tips other compensation 2 Federal income tax withheld 39,950.00 2,671.05 3 Social secunty wages 4 Social security tax withhold 42,950.00 2,662.90 5 Medicare wages and tips 6 Medicare tax withheld 42,950.00 622.78 7 Social Security tips 8 Allocated tips d Control number 9 10 Dependent care benefits e Employee's first name and initial Last name Suff 11 Nonqurified plans 12a See instructions for box 12 DD 17,485.00 13 Statutory angoyee Fettent Yid purty sakay 12b BRUCE H. HARRISON 1312 LOCUST STREET YOUR CITY, YS XXXXX D 3,000.00 14 Othor 12c 12d dos 1 Employee's address and ZIP code 15 State Employer's stato ID number YS 490020210A 18 Local wages, tips, to 19 Local income tax 20 Locality name 16 State Wages, tips to 39,950.00 17 State income tax 2,197.25 Department of the Treasury-Internal Revenue Service W-2 Wage and Tax Form Statement 2019 Copy B-To Be Filed With Employee's FEDERAL Tax Return This information is being furnished to the Internal Revenue Service a Employee's social security number 201-00-1451 b Employer identifcation number EIN) 09-2014503 c Employer's name, addross, and ZIP Code LOCAL NEWS NETWORK 112 NORTHERN STREET YOUR CITY, YS XXXXX Safe, accurate, Visit the IRS website at OMB No 1545-0008 FASTI Use re- file www.ss.govlalia 1 Wages, tips, other compensation 2 Federal income tax withheld 44,500.00 3,517.79 3 Social Securty wages 4 Social security tax withhold 44,500.00 2,759.00 5 Medicare wages and tips 6 Medicare tat withheld 44,500.00 645.25 7 Social secunty tp 8 Allocated tips d Control number 9 10 Dependent care benefits Employee's first name and initial Last name Suff 11 Nonqunified plans 12a See instructions for box 12 O. 13 Statutory DO Yilid-arty sky 12b 3 LOIS A. HARRISON 1312 LOCUST STREET YOUR CITY, YS XXXXX 14 Other 12c 12d 000 1 Employee's address and ZIP code 15 su Employer's staro ID number YS 490020211A 18 Local wages, tips, to 19 Local income tax 20 Locality name 16 State Wages, tips to 44,500.00 17 State income tax 2,447.50 Department of the Treasury--Internal Revenue Service Form 2019 Copy B-To Be Filed With Employee's FEDERAL Tax Return This information is being furnished to the Internal Revenue Service OMB No 1545-0115 2019 CORRECTED (if checked) PAYER'S name, street address, city or town, state or province, country, ZIP 1 Rents of foreign postal code, and telephone no. NEIGHBORHOOD COMMUNITY CENTER 2 Royalties 1511 CHERRY STREET YOUR CITY, YS XXXXX $ 816-555-XXXX 3 Other income $ RECIPIENT'S TIN 5Fishing boat proceeds Miscellaneous Income Form 1099-MISC 4 Federal income tax withheld B For Recipient PAYER'S TIN 6 Medical and health care payments 09-2014504 201-00-1451 RECIPIENT'S name 7 Nonemployee compensation 8 Substitute payments in lieu of dividends or interest This is important tax LOIS A. HARRISON information and is being furnished to Street address (induding apt. no.) $ 1,550.00 the IRS. If you are 9 Payer made direct sales of 10 Crop insurance proceeds required to file a 1312 LOCUST STREET $5,000 or more of consumo return, a negligence products to a buyer penalty or other City as town, state or province, country, and ZIP or foreign postal code frecipient for resale sanction may be 11 12 imposed on you it YOUR CITY, YS XXXXX this income is taxable and the IRS Account rambut see instruction) FATCA filing 13Excess golden parachute 14 Groess proceeds paid to an determines that it requirement payments attorney has not been reported. $ $ 15a Section 409A deferrals 15b Section 400A income 16 State tax withheld 17 State Payer's state na 18 State income $ $ $ $ $ Form 1099-MISC (keep for your records) www.its gov/Form1099MISC Department of the Treasury - Internal Reverse Service interest CORRECTED (if checked) RECIPENT SLENDER'S name, street address, city or town, state or Caution: The amount shown may OMB No 1545-1380 province, country, ZP or foreign postal code, and telephone no. not be fully deductible by you. Lmis based on the loan amount and the cost and value of the 2019 Mortgage secured property may apply. Also, Interest you may only doduct interest bothel REALTY MORTGAGE COMPANY extent it was incurred by you Statement 691 PLEASANT GROVE actually paid by you and not reimbursed by another person YOUR CITY, YS XXXXX Form 1098 XXX-555-XXXX 1 Mortgage interest received from payeris/bortower(s)* Copy B $ 8,241.64 For Payer/ RECIPIENTSLENDER'S TIN PAYER'S/BORROWER'S TIN 2 Outstanding mortgage 3 Mortgage origination date Borrower principal 05/04/2014 09-2014506 $ 125,067.00 The information in boxes 1 XXX-XX-0045 4 Rotund of overpad 5 Mortgage insurance through 9 and 11 is important premiums tax information and is being furnished to the IRS. If you are PAYER'S/BORROWER'S name $ required to file a return, a BRUCE AND LOIS HARRISON 6 Points pad on purchase of principal residence negligence penaty or other $ sanction may be imposed on you if the IRS determines that Street address (including apt. no.) 7 x address of property secuning mortgage is the same an underpayment of tax as PAYER'S/BORROWER'S address, the box is checked, or results because you 1312 LOCUST STREET the address or description is entered in box 8. overstated a deduction for this mortgage interest or for City or town, state or province, country, and ZIP or foreign postal code 8 Address or description of property securing mortgage (see these points, reported in instructions) boxes 1 and 6 or because YOUR CITY, YS XXXXX you didn't report the retund of interest box 4); or because 9 Number of properties secuning the 10 Other you claimed a nondeductible mortgage item. RE TAX: $2,315 11 Mortgage acquisition date Account number (see instructions) Form 1098 Keep for your records) www.its gov/Form 1098 Department of the Treasury - Internal Revenue Service SL0118 1095-B Health Coverage VOD OM No 1545-2252 Department of the Town Do not attach to your tax return. Keep for your records. CORRECTED 2019 Internal Revenue Sare Go to www.in.gov/form80058 for instructions and the latest information Partl Responsible Individual Name of responsable du Finstrade name astume 3 Scene ( Secther TN3 Date of bet SSN the N is not to BRUCE H. HARRISON XXX-XX-0045 4 Street adres including partnero) 5 City 6 State or provino 7 Courtyard ZIP foren portal.code 1312 LOCUST STREET YOUR CITY YS USA XXXXX OR Enter letter identitying Origin of the Health Coverage see instructions for codest Part 1 Information About Cortain Employer-Sponsored Coverage see instructions) 10 Employer name 11 Employer identication number EN ELM CONSTRUCTION AGENCY 09-2014502 12 She addendung Tomos) 15 Country and Performan poetal code 6 GREENWOOD LANE YOUR CITY YS USA XXXXX Part III Issuer or Other Coverage Provider see instructions) 17 Employectomber FIN 18 Contact telephone number GENERAL INSURANCE COMPANY 09-2014507 (XXX) 552-5543 10 Shades ancing Room) 20 Ceyron 21 Stato 22 Courty ZP or foreign postal code 1776 TURNBULL CANYON YOUR CITY YS USA XXXXX Part IV Covered Individuals (Enter the information for each covered individual.) (Name of ArchTIN (0) Marof Fusta, atrame The 12 Jan Feb Mar Apr May Jun M Sep Oct Nov Dec 14 Sep > BRUCE H. HARRISON XXX-XX-0045 . 24 LOIS A. HARRISON 201-00-1451 LYLA B. HARRISON 201-00-2451 X DO 0 0 OOOO O ** KEVIN E. HARRISON 201-00-2452 27 OOOOOOOOOO OOOOOOOOOOOOO For Privacy Act and Paperwork Reduction Act Notice, se separate instructions Cut. N.COM Fan 1096-B 2018 Form 1040, U.S. Individual Income Tax Return Schedule 1, Additional Income and Adjustments to Income Schedule 2, Additional Taxes Schedule 3, Additional Credits and Payments Schedule A, Itemized Deductions Schedule C, Profit or Loss from Business Schedule D, Capital Gains and Losses Schedule SE, Self-Employment Tax Form 2441, Child and Dependent Care Expenses Form 8995, Qualified Business Income Deduction Simplified Computation 2019 Qualified Business Income Deduction Worksheet Form 8867, Paid Preparer's Due Diligence Checklist 2019 IRA Deduction Worksheet - Schedule 1, Line 19 2019 Child Tax Credit and Credit for Other Dependents Worksheet - Line 13A Item Amount Notes 2018 State balance due $582 Made this payment on April 10, 2019 Cash donation to Cancer Research Foundation $475 Paid March 4, 2019 a Employee's social security number XXX-XX-0045 D Employer identification number EIN) 09-2014502 c Employer's name, address, and ZIP code ELM CONSTRUCTION AGENCY 6 GREENWOOD LANE YOUR CITY, YS XXXXX Safe, accurate, Visit the IRS website at OMB No 1545-0008 FAST! Use irse , file www.rs govtatile 1 Wages, tips other compensation 2 Federal income tax withheld 39,950.00 2,671.05 3 Social secunty wages 4 Social security tax withhold 42,950.00 2,662.90 5 Medicare wages and tips 6 Medicare tax withheld 42,950.00 622.78 7 Social Security tips 8 Allocated tips d Control number 9 10 Dependent care benefits e Employee's first name and initial Last name Suff 11 Nonqurified plans 12a See instructions for box 12 DD 17,485.00 13 Statutory angoyee Fettent Yid purty sakay 12b BRUCE H. HARRISON 1312 LOCUST STREET YOUR CITY, YS XXXXX D 3,000.00 14 Othor 12c 12d dos 1 Employee's address and ZIP code 15 State Employer's stato ID number YS 490020210A 18 Local wages, tips, to 19 Local income tax 20 Locality name 16 State Wages, tips to 39,950.00 17 State income tax 2,197.25 Department of the Treasury-Internal Revenue Service W-2 Wage and Tax Form Statement 2019 Copy B-To Be Filed With Employee's FEDERAL Tax Return This information is being furnished to the Internal Revenue Service a Employee's social security number 201-00-1451 b Employer identifcation number EIN) 09-2014503 c Employer's name, addross, and ZIP Code LOCAL NEWS NETWORK 112 NORTHERN STREET YOUR CITY, YS XXXXX Safe, accurate, Visit the IRS website at OMB No 1545-0008 FASTI Use re- file www.ss.govlalia 1 Wages, tips, other compensation 2 Federal income tax withheld 44,500.00 3,517.79 3 Social Securty wages 4 Social security tax withhold 44,500.00 2,759.00 5 Medicare wages and tips 6 Medicare tat withheld 44,500.00 645.25 7 Social secunty tp 8 Allocated tips d Control number 9 10 Dependent care benefits Employee's first name and initial Last name Suff 11 Nonqunified plans 12a See instructions for box 12 O. 13 Statutory DO Yilid-arty sky 12b 3 LOIS A. HARRISON 1312 LOCUST STREET YOUR CITY, YS XXXXX 14 Other 12c 12d 000 1 Employee's address and ZIP code 15 su Employer's staro ID number YS 490020211A 18 Local wages, tips, to 19 Local income tax 20 Locality name 16 State Wages, tips to 44,500.00 17 State income tax 2,447.50 Department of the Treasury--Internal Revenue Service Form 2019 Copy B-To Be Filed With Employee's FEDERAL Tax Return This information is being furnished to the Internal Revenue Service OMB No 1545-0115 2019 CORRECTED (if checked) PAYER'S name, street address, city or town, state or province, country, ZIP 1 Rents of foreign postal code, and telephone no. NEIGHBORHOOD COMMUNITY CENTER 2 Royalties 1511 CHERRY STREET YOUR CITY, YS XXXXX $ 816-555-XXXX 3 Other income $ RECIPIENT'S TIN 5Fishing boat proceeds Miscellaneous Income Form 1099-MISC 4 Federal income tax withheld B For Recipient PAYER'S TIN 6 Medical and health care payments 09-2014504 201-00-1451 RECIPIENT'S name 7 Nonemployee compensation 8 Substitute payments in lieu of dividends or interest This is important tax LOIS A. HARRISON information and is being furnished to Street address (induding apt. no.) $ 1,550.00 the IRS. If you are 9 Payer made direct sales of 10 Crop insurance proceeds required to file a 1312 LOCUST STREET $5,000 or more of consumo return, a negligence products to a buyer penalty or other City as town, state or province, country, and ZIP or foreign postal code frecipient for resale sanction may be 11 12 imposed on you it YOUR CITY, YS XXXXX this income is taxable and the IRS Account rambut see instruction) FATCA filing 13Excess golden parachute 14 Groess proceeds paid to an determines that it requirement payments attorney has not been reported. $ $ 15a Section 409A deferrals 15b Section 400A income 16 State tax withheld 17 State Payer's state na 18 State income $ $ $ $ $ Form 1099-MISC (keep for your records) www.its gov/Form1099MISC Department of the Treasury - Internal Reverse Service interest CORRECTED (if checked) RECIPENT SLENDER'S name, street address, city or town, state or Caution: The amount shown may OMB No 1545-1380 province, country, ZP or foreign postal code, and telephone no. not be fully deductible by you. Lmis based on the loan amount and the cost and value of the 2019 Mortgage secured property may apply. Also, Interest you may only doduct interest bothel REALTY MORTGAGE COMPANY extent it was incurred by you Statement 691 PLEASANT GROVE actually paid by you and not reimbursed by another person YOUR CITY, YS XXXXX Form 1098 XXX-555-XXXX 1 Mortgage interest received from payeris/bortower(s)* Copy B $ 8,241.64 For Payer/ RECIPIENTSLENDER'S TIN PAYER'S/BORROWER'S TIN 2 Outstanding mortgage 3 Mortgage origination date Borrower principal 05/04/2014 09-2014506 $ 125,067.00 The information in boxes 1 XXX-XX-0045 4 Rotund of overpad 5 Mortgage insurance through 9 and 11 is important premiums tax information and is being furnished to the IRS. If you are PAYER'S/BORROWER'S name $ required to file a return, a BRUCE AND LOIS HARRISON 6 Points pad on purchase of principal residence negligence penaty or other $ sanction may be imposed on you if the IRS determines that Street address (including apt. no.) 7 x address of property secuning mortgage is the same an underpayment of tax as PAYER'S/BORROWER'S address, the box is checked, or results because you 1312 LOCUST STREET the address or description is entered in box 8. overstated a deduction for this mortgage interest or for City or town, state or province, country, and ZIP or foreign postal code 8 Address or description of property securing mortgage (see these points, reported in instructions) boxes 1 and 6 or because YOUR CITY, YS XXXXX you didn't report the retund of interest box 4); or because 9 Number of properties secuning the 10 Other you claimed a nondeductible mortgage item. RE TAX: $2,315 11 Mortgage acquisition date Account number (see instructions) Form 1098 Keep for your records) www.its gov/Form 1098 Department of the Treasury - Internal Revenue Service SL0118 1095-B Health Coverage VOD OM No 1545-2252 Department of the Town Do not attach to your tax return. Keep for your records. CORRECTED 2019 Internal Revenue Sare Go to www.in.gov/form80058 for instructions and the latest information Partl Responsible Individual Name of responsable du Finstrade name astume 3 Scene ( Secther TN3 Date of bet SSN the N is not to BRUCE H. HARRISON XXX-XX-0045 4 Street adres including partnero) 5 City 6 State or provino 7 Courtyard ZIP foren portal.code 1312 LOCUST STREET YOUR CITY YS USA XXXXX OR Enter letter identitying Origin of the Health Coverage see instructions for codest Part 1 Information About Cortain Employer-Sponsored Coverage see instructions) 10 Employer name 11 Employer identication number EN ELM CONSTRUCTION AGENCY 09-2014502 12 She addendung Tomos) 15 Country and Performan poetal code 6 GREENWOOD LANE YOUR CITY YS USA XXXXX Part III Issuer or Other Coverage Provider see instructions) 17 Employectomber FIN 18 Contact telephone number GENERAL INSURANCE COMPANY 09-2014507 (XXX) 552-5543 10 Shades ancing Room) 20 Ceyron 21 Stato 22 Courty ZP or foreign postal code 1776 TURNBULL CANYON YOUR CITY YS USA XXXXX Part IV Covered Individuals (Enter the information for each covered individual.) (Name of ArchTIN (0) Marof Fusta, atrame The 12 Jan Feb Mar Apr May Jun M Sep Oct Nov Dec 14 Sep > BRUCE H. HARRISON XXX-XX-0045 . 24 LOIS A. HARRISON 201-00-1451 LYLA B. HARRISON 201-00-2451 X DO 0 0 OOOO O ** KEVIN E. HARRISON 201-00-2452 27 OOOOOOOOOO OOOOOOOOOOOOO For Privacy Act and Paperwork Reduction Act Notice, se separate instructions Cut. N.COM Fan 1096-B 2018 Form 1040, U.S. Individual Income Tax Return Schedule 1, Additional Income and Adjustments to Income Schedule 2, Additional Taxes Schedule 3, Additional Credits and Payments Schedule A, Itemized Deductions Schedule C, Profit or Loss from Business Schedule D, Capital Gains and Losses Schedule SE, Self-Employment Tax Form 2441, Child and Dependent Care Expenses Form 8995, Qualified Business Income Deduction Simplified Computation 2019 Qualified Business Income Deduction Worksheet Form 8867, Paid Preparer's Due Diligence Checklist 2019 IRA Deduction Worksheet - Schedule 1, Line 19 2019 Child Tax Credit and Credit for Other Dependents Worksheet - Line 13A