To: Student
From: Priscilla Partner
Date: March 1, 2022
Subject: Billy R. and Tish F. Doofus Tax
Return
I have recently been in discussions with Billy Ray Doofus
regarding the preparation of his 2021 tax return. Billy and I
have had a long-standing professional relationship, but it has just
been within the past few years that our firm started doing his
personal income taxes.
Billy and his wife Tish are both 55 years old. They
married on September 7, 2021. Billy and Tish plan to file a
joint return for 2021. Billy’s social security number is
444-45-4444. Tish’s social security number is
222-23-2222. They live in South Ogden. Their address is
1011 E 5450 S, Ogden, UT 84032.
Billy has invested in two different bond funds. The first
is called Utah Bonds Fund. It hold bonds issued only by Utah
or its municipalities. The second is called East Coast Bonds
Fund. It holds bonds issued by states on the East Coast (none
of which have reciprocity with Utah). In 2021, the Utah Bonds
Fund paid $1,200 in interest; the East Coast Bonds Fund paid $1,900
in interest. In addition to this interest income, Billy
earned $400 from several federal savings bonds.
Billy’s salary for 2021 was $110,000. Though he aspires to
be a country music star, he is currently a referee in World
Wrestling Entertainment (WWE), where he comfortably fits into a
role that calls on him to act as if he doesn’t understand what is
going on. WWE withheld $15,400 for Federal income taxes
and $3,400 for state income taxes. The following payroll
taxes were also withheld: $6,820 in FICA taxes ($110,000 x 6.2%)
and $1,595 ($110,000 x 1.45%) for Medicare. It should be
noted that Billy sits on the Parents Television Council, and chairs
the committee dedicated to protecting children from foul and
offensive material on Y.T.
Tish is a cosmetologist, but aspires to write books on
parenting. (I’ve always thought that she was the last person from
whom I would seek advice on parenting. Her daughter, Smiley,
now age 24, is an utter reprobate. She has done time for
possession and theft, has a history of drug use, and her
self-produced Y.T. videos are not for the faint of
heart!) Tish received a salary of $40,000 from the salon
where she worked in 2021. Her employer withheld $7,500 for
Federal income taxes and $2,300 for state income taxes. The
following payroll taxes were also withheld: $2,480 in FICA ($40,000
x 6.2%) and $580 ($40,000 x 1.45%) for Medicare.
Tish had $1,800 in qualified dividends from Hannah Montana
Corporation stock she inherited. She received a $950 refund
of 2020 state income taxes in 2021 and used the standard deduction
on her 2020 Federal tax return. Billy received a $1,600
refund on his 2020 state income taxes in 2021 and he itemized his
deductions on his 2020 Federal income tax return. Billy and
Tish paid $14,800 mortgage interest and $4,450 property taxes on
their personal residence in 2021. Their charitable
contributions total $14,000 (all to their church). Their
combined state income tax withholdings were $1,400.
- M E M O R A N D U M To Student From Priscilla Partner Date March 1 2022 Subject Billy R And Tish F Doofus Tax Ret 1 (178.01 KiB) Viewed 111 times
- M E M O R A N D U M To Student From Priscilla Partner Date March 1 2022 Subject Billy R And Tish F Doofus Tax Ret 2 (230.46 KiB) Viewed 111 times
- M E M O R A N D U M To Student From Priscilla Partner Date March 1 2022 Subject Billy R And Tish F Doofus Tax Ret 3 (176.25 KiB) Viewed 111 times
- M E M O R A N D U M To Student From Priscilla Partner Date March 1 2022 Subject Billy R And Tish F Doofus Tax Ret 4 (147.9 KiB) Viewed 111 times
Schedule 1 (Form 1040) 2021 Part II Adjustments to Income 11 Educator expenses . . . 11 12 Certain business expenses of reservists, performing artists, and fee-basis government officials. Attach Form 2106 13 Health savings account deduction. Attach Form 8889 14 Moving expenses for members of the Armed Forces. Attach Form 3903 15 Deductible part of self-employment tax. Attach Schedule SE 16 Self-employed SEP, SIMPLE, and qualified plans. 17 Self-employed health insurance deduction. 18 Penalty on early withdrawal of savings 19a Alimony paid. . b Recipient's SSN c Date of original divorce or separation agreement (see instructions) 20 IRA deduction . . . 21 Student loan interest deduction 22 Reserved for future use 23 Archer MSA deduction. 24 Other adjustments: a Jury duty pay (see instructions) 24a b Deductible expenses related to income reported on line 8k from the rental of personal property engaged in for profit 24b c Nontaxable amount of the value of Olympic and Paralympic medals and USOC prize money reported on line 81. 24c d Reforestation amortization and expenses 24d e Repayment of supplemental unemployment benefits under the Trade Act of 1974. . . . 24e f Contributions to section 501(c)(18) (D) pension plans 24f g Contributions by certain chaplains to section 403(b) plans 24g h Attorney fees and court costs for actions involving certain unlawful discrimination claims (see instructions)..... 24h i 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 .. 24i 24j j Housing deduction from Form 2555 k Excess deductions of section 67(e) expenses from Schedule K-1 (Form 1041)... 24k z Other adjustments. List type and amount 24z 25 Total other adjustments. Add lines 24a through 24z 25 26 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. 26 Schedule 1 (Form 1040) 2021 12-13|14|15|1617-18 2 19a Page 2 20 21 22 23
Itemized Deductions SCHEDULE A (Form 1040) ►Go to www.irs.gov/Schedule for instructions and the latest information. ►Attach to Form 1040 or 1040-SR. Department of the Treasury Internal Revenue Service (99) Caution: If you are claiming a net qualified disaster loss on Form 4684, see the instructions for line 16. Name(s) shown on Form 1040 or 1040-SR Caution: Do not include expenses reimbursed or paid by others. 1 Medical and dental expenses (see instructions) 1 Medical and Dental Expenses 2 Enter amount from Form 1040 or 1040-SR, line 112 3 Multiply line 2 by 7.5% (0.075). 3 4 Subtract line 3 from line 1. If line 3 is more than line 1, enter -0- 5 State and local taxes. Taxes You Paid a State and local income taxes or general sales taxes. You may include either income taxes or general sales taxes on line 5a, but not both. If you elect to include general sales taxes instead of income taxes, check this box. 5a b State and local real estate taxes (see instructions). 5b c State and local personal property taxes. 5c d Add lines 5a through 5c. 5d e Enter the smaller of line 5d or $10,000 ($5,000 if married filing separately) 5e 6 Other taxes. List type and amount 6 7 Add lines 5e and 6 Interest You Paid Caution: Your mortgage interest deduction may be limited (see instructions). 8 Home mortgage interest and points. If you didn't use all of your home mortgage loan(s) to buy, build, or improve your home, see instructions and check this box a Home mortgage interest and points reported to you on Form 1098. See instructions if limited 8a b Home mortgage interest not reported to you on Form 1098. See instructions if limited. If paid to the person from whom you bought the home, see instructions and show that person's name, identifying no., and address. 8b c Points not reported to you on Form 1098. See instructions for special rules. 8c d Mortgage insurance premiums (see instructions). 8d e Add lines 8a through 8d. 8e 9 9 Investment interest. Attach Form 4952 if required. See instructions. 10 Add lines 8e and 9 10 Gifts to Charity Caution: If you 11 Gifts by cash or check. If you made any gift of $250 or more, see instructions .. 11 made a gift and 12 Other than by cash or check. If you made any gift of $250 or more, see instructions. You must attach Form 8283 if over $500. 12 got a benefit for it, see instructions. 13 Carryover from prior year 13 14 Add lines 11 through 13. 14 Casualty and 15 Theft Losses Casualty and theft loss(es) from a federally declared disaster (other than net qualified disaster losses). Attach Form 4684 and enter the amount from line 18 of that form. See instructions. 15 16 Other-from list in instructions. List type and amount Other Itemized Deductions 16 17 Total 17 Add the amounts in the far right column for lines 4 through 16. Also, enter this amount on Itemized Form 1040 or 1040-SR, line 12a Deductions 18 If you elect to itemize deductions even though they are less than your standard deduction, check this box. For Paperwork Reduction Act Notice, see the Instructions for Forms 1040 and 1040-SR. Cat. No. 17145C Schedule A (Form 1040) 2021 E OMB No. 1545-0074 2021 Attachment Sequence No. 07 Your social security number 7
SCHEDULE B (Form 1040) Interest and Ordinary Dividends Go to www.irs.gov/ScheduleB for instructions and the latest information. ►Attach to Form 1040 or 1040-SR. Department of the Treasury Internal Revenue Service (99) Name(s) shown on retur Part I 1 List name of payer. If any interest is from a seller-financed mortgage and the buyer used the property as a personal residence, see the instructions and list this interest first. Also, show that buyer's social security number and address ► Interest (See instructions and the Instructions for Form 1040, line 2b.) 1 Note: If you received a Form 1099-INT, Form 1099-OID, or substitute statement from a brokerage firm, list the firm's name as the payer and enter the total interest shown on that form. 2 Add the amounts on line 1. 2 3 Excludable interest on series EE and I U.S. savings bonds issued after 1989. Attach Form 8815. 3 4 Subtract line 3 from line 2. Enter the result here and on Form 1040 or 1040-SR, line 2b 4 Note: If line 4 is over $1,500, you must complete Part III. 5 List name of payer ▶ Part II Ordinary Dividends (See instructions and the Instructions for Form 1040, line 3b.) 5 Note: If you received a Form 1099-DIV or substitute statement from a brokerage firm, list the firm's name as the payer and enter the ordinary dividends shown on that form. 6 Add the amounts on line 5. Enter the total here and on Form 1040 or 1040-SR, line 3b 6 Note: If line 6 is over $1,500, you must complete Part III. Part III Foreign Accounts and Trusts You must complete this part if you (a) had over $1,500 of taxable interest or ordinary dividends; (b) had a foreign account; or (c) received a distribution from, or were a grantor of, or a transferorto, a foreign trust. 7a At any time during 2021, did you have a financial interest in or signature authority over a financial account (such as a bank account, securities account, or brokerage account) located in a foreign country? See instructions.... If "Yes," are you required to file FinCEN Form 114, Report of Foreign Bank and Financial Accounts (FBAR), to report that financial interest or signature authority? See FinCEN Form 114 and its instructions for filing requirements and exceptions to those requirements. Caution: If required, failure to file FinCEN Form 114 may result in substantial penalties. See instructions. b If you are required to file FinCEN Form 114, enter the name of the foreign country where the financial account is located ▶ 8 During 2021, did you receive a distribution from, or were you the grantor of, or transferor to, a foreign trust? If "Yes," you may have to file Form 3520. See instructions. For Paperwork Reduction Act Notice, see your tax return instructions. Cat. No. 17146N OMB No. 1545-0074 2021 Attachment Sequence No. 08 Your social security number Amount Amount Yes No Schedule B (Form 1040) 2021
2021 Tax Rate Schedules The Tax Rate Schedules are shown so you can see the tax rate that applies to all levels of taxable income. Don't use them to figure your tax Instead, see Chapter 13. CAUTION Schedule X-If your filing status is Single If your taxable income is: The tax is: Over- But not over- of the amount over- SO $9,950 -------10% 9,950 40,525 $995.00 +12% $0 9,950 40,525 40,525 86,375 4,664.00 +22% 86,375 164,925 14,751.00 +24% 86,375 164,925 209,425 33,603.00 +32% 164,925 209,425 523,600 209,425 47,843.00 + 35% 157,804.25 +37% 523,600 523,600 Schedule Y-1-If your filing status is Married filing jointly or Qualifying widow(er) If your taxable income is: The tax is: Over- But not over- of the amount over- $0 $19,900 ------- 10% 19,900 81,050 $1,990.00 + 12% $0 19,900 81,050 81,050 172,750 9,328.00 +22% 172,750 329,850 29,502.00 +24% 172,750 329,850 418,850 67,206.00 +32% 329,850 418,850 628,300 95,686.00 +35% 418,850 628,300 168,993.50 +37% 628,300 Schedule Y-2-If your filing status is Married filing separately If your taxable income is: The tax is: Over- But not over- of the amount over- $0 $9,950 ------- 10% $0 9,950 40,525 $995.00 +12% 9,950 40,525 86,375 4,664.00 +22% 40,525 86,375 164,925 14,751.00 +24% 86,375 164,925 209,425 33,603.00 +32% 164,925 209,425 314,150 47,843.00+ 35% 209,425 314,150 84,496.75 +37% 314,150 Schedule Z-If your filing status is Head of household If your taxable income is: The tax is: Over- But not over- of the amount over- $0 -------10% $0 14,200 14,200 $1,420.00 +12% 54,200 6,220.00 +22% 54,200 86,350 13,293.00 +24% 86,350 164,900 32,145.00 + 32% 164,900 209,400 46,385.00 + 35% 209,400 523,600 156,355.00+ 37% 523,600 $14,200 54,200 86,350 164,900 209,400 523,600