Please complete
the2021 Form 1040(Stop after completing Line 12a, round up
to the nearest dollar),
Schedule-1 and Schedule
Afor the taxpayer:
Julie Anderson is
a project manager and her wage is 74,300. Julie's father passed away on April
14. She inherited her father’s cottage (vacation home) in Montana and 80,000
cash. She used the 80,000 to invest in an annuity product that pays her $
10,000 per year for the next 10 years. The first yearly payment ($10,000) was
received on December 15th, 2021
Her 2021 filing status
is Single. She also has the following items for 2019:
Interest income from:
Capital
One
200
City of San Francisco
municipal bond 600
US Treasury
bond.
800
Ordinary dividends from
her investment in Wells Fargo… $400. All the dividends are qualified for the
15% tax rate.
She also bought 50
shares Apple Inc. stock (AAPL) when the price was $100 per share. AAPL's market
closing price for December 2021 is $250 per share. No shares were sold during
the year.
During the year she went
to Wynn Las Vegas and won $ 1,300 in a poker game. However, she lost $2,000 at
another casino.
She received $4,000
insurance payout from AFLAC. The insurance policy was bought by herself.
She has the following
refunds and withholdings in 2021, and took the standard deduction on her 2018
federal tax return.
California state income
tax refund……… 250
State income tax
withheld from her paycheck…………………. .4200
Federal income tax withheld
from her paycheck………………. 9000
Social security tax paid
as an employee XXXXXXXXXX
She owns and lives in
her house in Fresno, CA and has the following expenses:
Home mortgage loan
interest………………… 8700
Home mortgage loan
points (not reported on Form 1098)….. 200
Real estate tax on her
house………………… 4000
Personal-use car loan
interest……………….. 2000
She also paid 2000 of
qualified student loan interest.
Ms. Anderson had a
medical procedure and incurred qualified medical costs of $30,000. Her health
insurance policy pays 80% of the medical cost and Julie paid the remaining 20%
out of her own pocket.
Julie also wanted to ask you the following questions:
- Where/On
which schedule can she deduct any utilities and insurance on the cottage
if she rents out the vacation home for income next year?
- Can
she deduct any fees paid to attorneys to execute her father’s will this
year?
- Can she deduct any fees paid to
you to prepare her tax return this year?