ACT405 – Portfolio Project Case 1
Comprehensive Tax Problem – Option 1
Taxpayer Information
Name: John Washington
Address: XXXXXXXXXXGreen St.
Miami, FL 54321
DOB: 5/5/1960
Filing Status: Ma
ied
SSN: XXXXXXXXXX
Occupation: Enginee
Name: De
a Washington
Address: 3450 Green St.
Miami, FL 54321
DOB: 7/7/1962
Filing Status: Ma
ied
SSN: XXXXXXXXXX
Occupation: Teache
INCOME INFORMATION:
Wages and Compensation
The following information is taken from John Washington’s 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 De
a Washington’s 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
De
a 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, XXXXXXXXXXThe 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. De
a had educator expenses in 2017 of $450.00
2. John had gambling winnings of $1,000.
3. John was the beneficiary of his mother’s life insurance policy.
His mother died in 2017 and he received $50,000 under this policy.
4. De
a paid $700 in student loan interest.
Form 1040
Form 1040 Department of the Treasury Internal Revenue Service 2016
U.S. Individual Tax Form
OMB No XXXXXXXXXX IRS Use Only--Do not write or staple in this space
For the year Jan.1--Dec. 31,2016, or any other tax year beginning ,2016, ,20 See Separate Instructions
Your first name and initial Last name Social Security Numbe
If a joint return, spouses first name and initial Last name Spouse Social Security Numbe
Home address( number and street). If you have a P.O. Box, see instructions Make Sure that the SSN(s) above
and on line 6c are co
ect .
City, town, or post office, state, and zip code. If you have a foreign address, also complete spaces below (see instructions). Presidential Election Campaign
Check here if you, or your spouse if filing jointly,
Foreign country name Foreign province/state/country Foreign postal code checking this box below will not change your tax
refund. you spouse
Filing Status 1. Single 4.Head of Household (with qualifying person.) (See instructions.) If
Check only one box 2.. ma
ied filing jointly the qualifying person is a child but not your dependent, enter this
3. Ma
ied filing separately. Enter spouse's SSN above child's name here
and full name here. 5. Qualifying Window(er) with dependent child
Exemptions 6a Yourself. If someone can claim you as a dependent, do not check box 6a ] Boxes checked
b spouse ] on 6a and 6
If more than four c. Dependents
dependents, see (1) First name Last name (2) dependents (3) dependents (4) check if child under age 17 No. of children
instructions and social security number relationship to you qualifying for tax credit see on 6c who:
check here instructions. lived with you
did not live with you
due to divorce o
separation
(see instructions)
Dependents on
6c not entered
above
d. Total number of Exemptions Claimed Add numbers on lines above
Income 7 Wages, salaries, tips, etc. Attach Forms (W-2) 7
8a Taxable interest. Attach Schedule B if required 8a
Attach Form(s) b Tax-exempt interest. Do not include on line 8a 8
W-2 here. Also 9a Ordinary dividends. Attach Schedule B if required 9a
attach Forms(s) b Qualified dividends 9
W-2 and 1099-R 10 Taxable refunds, credits, or offsets state or local income taxes 10
if tax was withheld. 11 Alimony received 11
12 Business income or (loss). Attach Schedule C or C-EZ 12
If you did not 13 Capital gain or (loss). Attach Schedule D if required. If not required, check here 13
get a W-2, 14 other gains or (losses). Attach Form 4797 14
see instructions 15a IRA distributions 15a b Taxable amount 15
16a Pensions and annuities 16a b Taxable amount 16
17 Rental real estate, royalties, partnerships, S corporations, trusts, etc. Attach Schedule E 17
18 Farm income or (loss). Attach Schedule F 18
19 Unemployment compensation 19
20a Social security benefits 20a b Taxable amount 20
21 other income. List type and amount 21
22 combine the amounts in the far right column for lines 7 through 21. This is your total income This is your total income. 22
Adjusted 23 Educator expenses 23
Gross 24 Certain business expenses of reservists, performing artists, and fee-basis government. Attach Form 2106 or 2106-EZ 24
Income
25 Health-savings account deduction. Attach Form 8889 25
26 Moving Expenses. Attach Form 3903 26
27 Deductible part of self-employment tax. Attach Schedule SE 27
28 Self-employed SEP, SIMPLE, and qualified plans 28
29 Self-employed health insurance deduction 29
30 Penalty on early withdrawal of savings 30
31a Alimony paid b. Recipient's SSN 31a
32 IRA deduction 32
33 Student loan interest deduction 33
34 Tuition and fees. Attach Form 8917 34
35 Domestic production activities deduction. Attach Form 8903 35
36 Add lines 23 through 35 36
37 Subtract line 36 from line 22. This is your adjusted gross income. 37
Schedule A
SCHEDULE A OMB No XXXXXXXXXX
(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 numbe
XXXXXXXXXXMedical XXXXXXXXXXand XXXXXXXXXXDental XXXXXXXXXXExpenses 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% XXXXXXXXXXBut if either you or your spouse was
born before January 2, 1949, multiply line 2 by 7.5% XXXXXXXXXXinstead 3
4 Subtract line 3 from line 1. If line 3 is more than line 1, enter -0-. . . . . . . . 4
Taxes You XXXXXXXXXXPaid 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. XXXXXXXXXXYour 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 person’s name, identifying no., and address ▶
11
12 Points not reported to you on Form 1098. See instructions fo
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. . . . . . . . . . . .