There are two parts to this assessment . Be sure to complete both parts and subm
ID: 2602051 • Letter: T
Question
There are two parts to this assessment. Be sure to complete both parts and submit the necessary materials.
Part 1: Determine eligible tax credits by completing official worksheets.
Part 2: Complete Schedule A and the 1040. Preparation Read the information provided in the scenario below.
Download the following tax forms and instructions from IRS.gov, linked in the Resources under the Required Resources heading: 1040. Schedule A. 2441. 3800. 5884. 6251. 8826.
Part 1 Use the information in the scenario, on IRS.gov, and in the interactive IRS tools to interpret official rules and instructions to determine available tax credits. Complete an official worksheet for each tax credit to demonstrate eligibility.
Submit each tax credit worksheet.
Part 2 Use the information in the scenario, on IRS.gov, and in the interactive IRS tools to Interpret official rules and instructions to complete the following:
Complete Schedule A. Enter data from Schedule A into the 1040. Apply the rules and tax tables to calculate the tax owed and the amount of any refund.
Submit Schedule A and the completed 1040.
Scenario
Jacob and Taylor Weaver, ages 45 and 42 respectively, are married and are filing jointly in 2016.
They have three children, Ashley, age 9; Patrick, age 6; and John, age 18.
Social Security numbers are: Jacob, 222-33-4444; Taylor, 555-66-7777; Ashley, 888-99-1234; Patrick, 789-56-4321; John, 123-45-6789.
Jacob is self-employed as a contractor. 2016 net income: $133,000.
Clients owe him a total of $53,000 for work completed in 2016.
2016 estimated tax payments: $25,000.
Taylor works part-time as a paralegal. She earned $26,000 in 2016.
Federal income withholding: $2,350.
Weavers $350 paid with their 2015 state tax return.
Jacob and Taylor bought their house in 2016.
Home mortgage interest: $7,246. Property tax: $2,230.
Charities: $4,500.
$435 to rent a moving truck.
$8,000 to put new siding on the house.
$11,600 for child care expenses ($5,800 for each child).
It was paid to Lil Tigers Daycare, 1115 S. Garrison St., Muncie, IN 47305 (EIN 98-7654321).
Taylor is a part-time student at Ball State University in Muncie.
She received a 1098-T indicating tuition and fees for 2016 in the amount of $6,011.
Health insurance for the family, through Taylor's job, cost $6000 for all 12 months of 2016.
They paid deductibles and co-payments of $550. Dental insurance for the family was $1200.
Car insurance for the family car was $600.
Explanation / Answer
chedule A Itemized deductions 2016
Medical & dental exps Medical & dental expenses 1. $ 7200
Amount from Form 1040, line 38 2. $ 127554
Multiply line 2 by 10% (0.10). 3. $ 12755.4
Subtract line 3 from line 1. If line 3 is more than line 1, enter -0 4. 0
Taxes you paid
5. State and local (check only one box): Income tax 5. $ 25000
6. Real estate taxes (see instructions) 6. --
7. Personal property taxes . 7. $ 2230
8. other taxes 8. ---
9. Add lines 5 through 8 . 9. $ 27230
Interest You Paid
10. Home mortgage interest paid 10. $ 7246
11. Mortgage points not recorded 11. ----
12 Points not reported to you on Form 1098 12. ----
13 Mortgage insurance premiums 13. ---
14 Investment interest. 14. ---
15 add line for 11 through 14 15. $ 0
Gifts to Charity
16. Gifts by cash 16. $ 4500
17. other than cash 17. ----
18. carryover from prior year 18. ----
19. Add lines 16 through 18 . . 19. $ 4500
Casualty and Theft Losses
20. Casualty or theft loss(es). 20. ----
Job Exps & Miscellaneous Deductions
21.Unreimbursed employee expenses 21. ---
22.Tax preparation expenses 22. ---
23.other expenses 23. ---
24.Add lines 21 through 23 . 24. ---
25. Enter amount from Form 1040, line 38 25. $ 127554
26. Multiply line 25 by 2% (0.02) . . 26. $ 2551.08
27. Subtract line 26 from line 24. If line 26 is more than line 24, enter -0- 27. $ 0
Other Miscellaneous Deductions
28. Other—from list in instructions. 28. ---
Total Itemized Deductions
29. Is Form 1040, line 38, over $155,650?
No. Your deduction is not limited. 29. $ 27551.08
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