Jim and Anna Hilton (SS# xxx-xxx-xxx and yyy-yyy-yy) are married and have one child, Tina who is a dependent but does no
Posted: Wed Jul 06, 2022 6:00 am
Jim and Anna Hilton (SS# xxx-xxx-xxx and yyy-yyy-yy) are marriedand have one child, Tina who is a dependent but does not qualifyfor the child tax credit. Jenny's SS# is bbb-bb-bbbb and she iscurrently in college. Jim works as a high school teacher (will takethe educator expenses) and contributed to a qualified IRA and hasno tax limitations on the deduction. Anna runs a craft businessfrom their home. Anna’s employer portion of the self-employment taxon Anna’s income is $831 which is the deductible amount and noschedule SE needed for this return. Anna was divorced on June 30,2020, and received $ 1,200 in alimony during 2021.
Note: Neither Jim nor Anna is blind or over age 65, and theyplan to take the standard deduction and file their tax return withthe IRS as married filing joint.
Jim and Anna income and expenses are:
Income:Jim’s salary 59,100Anna’s businessincome 21,765Interest from savings account 2,366Interest from municipal bond funds 920
Gambling winnings 4,100
Anna’s alimonyreceived 1,200
IRA distributions (50%taxable) 5,400
Expenditures:Federal income tax withheld from Jim’s wages 13,700State income tax withheld from Jim’swages 6,400Social Security tax withheld from Jim’s wages 7,482Anna self-employment tax (50% adjustment to income) 1,662 – (Noschedule SE required)Interest on studentloans 2,300Educatorexpenses 300
Penalty on early withdrawals ofsavings 720
IRAdeduction 900
Charitable contributions (line 10b in Form1040) 200
Based on the above information, determine Jim and Anna’sAGI and taxable income for the year and complete only page 1 ofForm 1040 (through taxable income, line 15) and Schedule 1 for2021.
Note: Neither Jim nor Anna is blind or over age 65, and theyplan to take the standard deduction and file their tax return withthe IRS as married filing joint.
Jim and Anna income and expenses are:
Income:Jim’s salary 59,100Anna’s businessincome 21,765Interest from savings account 2,366Interest from municipal bond funds 920
Gambling winnings 4,100
Anna’s alimonyreceived 1,200
IRA distributions (50%taxable) 5,400
Expenditures:Federal income tax withheld from Jim’s wages 13,700State income tax withheld from Jim’swages 6,400Social Security tax withheld from Jim’s wages 7,482Anna self-employment tax (50% adjustment to income) 1,662 – (Noschedule SE required)Interest on studentloans 2,300Educatorexpenses 300
Penalty on early withdrawals ofsavings 720
IRAdeduction 900
Charitable contributions (line 10b in Form1040) 200
Based on the above information, determine Jim and Anna’sAGI and taxable income for the year and complete only page 1 ofForm 1040 (through taxable income, line 15) and Schedule 1 for2021.