Diana and Ryan Workman were married on January 1 of last year. Ryan has an eight-year-old son, Jorge, from his previous

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Diana And Ryan Workman Were Married On January 1 Of Last Year Ryan Has An Eight Year Old Son Jorge From His Previous 1 (116.29 KiB) Viewed 20 times

Diana and Ryan Workman were married on January 1 of last year. Ryan has an eight-year-old son, Jorge, from his previous marriage. Diana works as a computer programmer at Datafile Incorporated (DI) earning a salary of $104,000. Ryan is self- employed and runs a day care center. The Workmans reported the following financial information pertaining to their activities during the current year. a. Diana earned a $104,000 salary for the year. b. Diana borrowed $13,600 from DI to purchase a car. DI charged her 2 percent interest ($272) on the loan, which Diana paid on December 31. DI would have charged Diana $880 if interest had been calculated at the applicable federal interest rate. Assume that tax avoidance was not a motive for the loan. c. Ryan received $2,800 in alimony and $6,100 in child support payments from his former spouse. They divorced in 2016. d. Ryan won a $1,060 cash prize at his church-sponsored Bingo game. e. The Workmans received $1,300 of interest from corporate bonds and $1,050 of interest from a municipal bond. Ryan owned these bonds before he married Daina. f. The couple bought 82 shares of ABC Incorporated stock for $56 per share on July 2. The stock was worth $79 a share on December 31. The stock paid a dividend of $1 per share on December 1. g. Ryan's father passed away on April 14. He inherited cash of $66,000 from his father and his baseball card collection, valued at $3,600. As the beneficiary of his father's life insurance policy, Ryan also received $166,000. h. The couple spent a weekend in Atlantic City in November and came home with gross gambling winnings of $2,800. 1. Diana received $3,600 cash for reaching 10 years of continuous service at DI. j. Diana was hit and injured by a drunk driver while crossing a street at a crosswalk. she was unable to work for a month. She received $9,200 from her disability insurance. DI paid the premiums for Diana, but it reported the amount of the premiums as compensation to Diana on her year-end W-2. k. The drunk driver who hit Diana in part (j) was required to pay her $3,600 medical costs, $3,100 for the emotional trauma she suffered from the accident, and $8,200 for punitive damages. 1. For meeting her performance goals this year, Diana was informed on December 27 that she would receive a $6,600 year-end bonus. DI (located in Houston, Texas) mailed Diana's bonus check from its payroll processing center (Tampa, Florida) on December 28. Diana didn't receive the check at home until January 2. m. Ryan is a 10 percent owner of MNO Incorporated, a Subchapter S corporation. The company reported ordinary business income for the year of $125,500. Ryan acquired the MNO stock two years ago. n. Ryan's day care business collected $115,000 in revenues. In addition, customers owed him $11,000 at year-end. During the year, Ryan spent $13,500 for supplies, $9,500 for utilities, $31,000 for rent, and $1,300 for miscellaneous expenses. One customer gave him use of their vacation home for a week (worth $10,500) in exchange for Ryan allowing their child to attend the day care center free of charge. Ryan accounts for his business activities using the cash method of accounting.
n. Ryan's day care business collected $115,000 in revenues. In addition, customers owed him $11,000 at year-end. During the year, Ryan spent $13,500 for supplies, $9,500 for utilities, $31,000 for rent, and $1,300 for miscellaneous expenses. One customer gave him use of their vacation home for a week (worth $10,500) in exchange for Ryan allowing their child to attend the day care center free of charge. Ryan accounts for his business activities using the cash method of accounting. o. Diana's employer pays the couple's annual health insurance premiums of $13,500 for a qualified plan. 2. Complete page 1 of Form 1040 through line 9 and Schedule 1 for the Workmans (for filing MFJ). Note: Input all the values as positive numbers. Enter any non-financial information, (e.g. Names, Addresses, social security numbers) EXACTLY as they appear in any given information or Problem Statement. Do not skip rows, while entering in Deductions section of Form 1040 PG1. Assume the dividends are qualified dividends. Neither Ryan nor Diana wish to contribute to the Presidential Election Campaign fund or had any virtual currency transactions or interests. Ryan's and Diana's add is 19010 N.W. 135th Street, Miami, FL 33054 Social security numbers: Ryan:111-22-3333 Diana: 222-33-4444 Jorge: 333-44-5555 1040 for a couple Married Filing Jointly with one dependent.
1040 PG 1 Form 1040 Schedule 1. SCHEDULE 1 (Form 1040) Department of the Treasury Internal Revenue Service 23 b 3 4 Name(s) shown on Form 1040, 1040-SR, or 1040-NR Diana and Ryan Workman Part I 1 5 6 7 8 a b C d e f 9 h 1 Schedule 1 J k I Additional Income and Adjustments to Income ▶ Attach to Form 1040, 1040-SR, or 1040-NR. Go to www.irs.gov/Form1040 for instructions and the latest information. Additional Income Taxable refunds, credits, or offsets of state and local income taxes Alimony received Date of original divorce or separation agreement (see instructions) ► Business income or (loss). Attach Schedule C Other gains or (losses). Attach Form 4797 Rental real estate, royalties, partnerships, S corporations, trusts, etc. Attach Schedule E Farm income or (loss). Attach Schedule F Unemployment compensation. Other income: Net operating loss Gambling income Cancellation of debt Foreign earned income exclusion from Form 2555 Taxable Health Savings Account distribution Alaska Permanent Fund dividends Jury duty pay Prizes and awards Activity not engaged in for profit income Stock options Income from the rental of personal property if you engaged in the rental for profit but were not in the business of rensing such property Olympic and Paralympic medals and USOC prize money (see instructions) Section 951(a) inclusion (see instructions) December 31, 2016 8a 8b 80 8d Se 81 8g 8h 81 5j Sk 81 8m OMB No. 1545-0074 2021 Attachment Sequence No. 01 Your social security number 111-22-3333 1 3 4 5 7
I m P 2 9 10 Part II 11 12 13 14 15 16 17 18 199 b 20 21 22 24 2 b C d C f 9 Olympic and Paralympic medals and USOC prize money (see instructions) Section 951(a) inclusion (see instructions) Section 951A(a) inclusion (see instructions) Section 461() excess business loss adjustment Taxable distributions from an ABLE account (see instructions) Other income. List type and amount ▶ Punitive damages Total other income. Add lines 8a through 8z Combine lines 1 through 7 and 9. Enter here and on Form 1040, 1040-SR, or 1040-NR, line 8 Adjustments to Income Penalty on early withdrawal of savings Alimony paid Recipient's SSN Date of original divorce or separation agreement (see instructions) IRA deduction Student loan interest deduction Reserved for future use 81 Archer MSA deduction Other adjustments: Jury duty pay (see instructions) Deductible expenses related to income reported on line 8k from the rental of personal property engaged in for profit Nontaxable amount of the value of Olympic and Paralympic medals and USOC prize money reported on line Bl Reforestation amortization and expenses Repayment of supplemental unemployment benefits under the Trade Act of 1974 Contributions to section 501(c)(18)(D) pension plans Contributions by certain chaplains to section 403(b) plans 5533 8m 8n 80 Educator expenses Certain business expenses of reservists, performing artists, and fee-basis government officials. Attach Form 2106 Health savings account deduction. Attach Form 8889 Moving expenses for members of the Armed Forces. Attach Form 3903 Deductible part of self-employment tax. Attach Schedule SE Self-employed SEP, SIMPLE, and qualified plans Self-employed health insurance deduction 8p Bz 24a 24b 24c 24d 240 241 24g 9 10 11 12 13 14 15 16 17 18 193 20 21 22 23 0 0
19a b C 20 21 22 23 24 a b C d C f 9 h I J k 2 25 26 Alimony paid Recipient's SSN Date of original divorce or separation agreement (see instructions) IRA deduction Student loan interest deduction Reserved for future use Archer MSA deduction Other adjustments: Jury duty pay (see instructions) Deductible expenses related to income reported on line 8k from the rental of personal property engaged in for profit Nontaxable amount of the value of Olympic and Paralympic medals and USOC prize money reported on line Bl Reforestation amortization and expenses Repayment of supplemental unemployment benefits under the Trade Act of 1974 Contributions to section 501(c)(18)(D) pension plans Contributions by certain chaplains to section 403(b) plans Attorey fees and court costs for actions involving certain unlawful discrimination claims (see instructions) Attorney fees and court costs you paid in connection with an award from the IRS for information you provided that helped the IRS detect tax law violations Housing deduction from Farm 2555 Excess deductions of section 67(e) expenses from Schedule K-1 (Form 1041) Other adjustments. List type and amount ▶ Total other adjustments. Add lines 24a through 24z Add lines 11 through 23 and 25. These are your adjustments to income. Enter here and on Form 1040 or 1040-SR, line 10, or Form 1040-NR, line 10a 242 1040 PG 1 24b 24c 24d 240 241 24g 24h 241 24 24k 24z 19a Schedule 1 20 21 22 25 Cat. No. 71479F Schedule 1 (Form 1040) 2021 r Paperwork Reduction Act Notice, see your tax return instructions. THIS FORM IS A SIMULATION OF AN OFFICIAL U.S. TAX FORM. IT IS NOT THE OFFICIAL FORM ITSELF. DO NOT USE THIS FORM FOR TAX FILINGS OR FOR ANY PURPOSE OTHER THAN EDUCATIONAL.Ⓒ2022 McGraw-Hill Education. 26