question archive Fill out a Form 1040 (including any schedules 1-6 needed), Schedule A, and Schedule C using the following information

Fill out a Form 1040 (including any schedules 1-6 needed), Schedule A, and Schedule C using the following information

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Fill out a Form 1040 (including any schedules 1-6 needed), Schedule A, and Schedule C using the following information. During 2018, Terry Taxpayer (SSN 222-11-3333) and Kelly Taxpayer (SSN 111-22-4444) were married and lived together all year in the state of Confusion (with laws similar to those in the state of California). Terry and Kelly have two children who lived with them all year, Chris (SSN 223-33-4444) and Alex (SSN 333-22-1111) ages 9 and 7 on December 31, 2018.

Terry earned $120,000 in wages. Terry had $6,900 withheld to go toward 2018 state income taxes and during 2018 had $2,415 withheld to pay toward state disability taxes.

Kelly created a small business that consisted of an internet site devoted to preparing tax returns. Kelly used a spare room in the house they owned to run the business and the room was used exclusively for business. The spare room was 600 square feet out of a total 4200 total square feet for the house. Terry and Kelly spent $1,300 for the year on household utilities and the depreciation on the whole house (if Kelly and Terry could have claimed depreciation on the whole house) was $2,800 for the year.

Kelly earned $2,065 in revenue from the internet business for the year, paid a $80 subscription fee to GoDaddy.com to get a domain name. Kelly had no other expenses except to try to improve the chances of getting business, Kelly gave five prospective customers a decorative time clock (with no advertising), one to each customer, and each clock cost $100 a piece.

After preparing their 2018 state income tax return, Kelly and Terry discovered they owed $4,500 in state income taxes to the state of Confusion which they paid on April 15, 2019.

On March 25, 2018, they donated a car worth $5,350 to the local 501(c)(3) charity devoted to helping animals harmed in the making of motion pictures. That charity immediately sold the car for $4,650 (the car was properly acknowledged by the charity, but not appraised).

During 2018, the couple paid property taxes to the state of Confusion $8,200 on their personal residence and paid $18,000 in mortgage interest on the $340,000 loan they used to purchase their personal residence.

 

*** Make any reasonable assumptions for missing data (assume that they had $7,900 in federal income taxes withheld on the wages earned during the year), ignore any self-employment taxes, ignore any Earned Income Credit, and ignore any alternative minimum tax.*** If you cannot upload your completed forms to Canvas, or your are not sure whether blank forms are uploaded,email your forms to me during the test time frame.

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