PRACTICEPROBLEM1SOLUTION

PRACTICEPROBLEM1SOLUTION - Form Department of the Treasury...

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Unformatted text preview: Form Department of the Treasury 1040 Name, Address, and SSN ' Internal Revenue Service U.S. Individual Income Tax Return For the year Jan 1 - Dec 31, 2010, or other tax year beginning Your first name (99) IRS Use Only , 2010, ending MI OMB No. 1545-0074 Your social security number Last name MI ' Do not write or staple in this space. , 20 Last name John UCSD If a joint return, spouse's first name See separate instructions. 2010 999-99-9999 Spouse's social security number Jane UCSD 999-99-9998 Home address (number and street). If you have a P.O. box, see instructions. Make sure the SSN(s) above and on line 6c are correct. Apartment no. Practice Problem 1 City, town or post office. If you have a foreign address, see instructions. Presidential Election Campaign Filing Status Check only one box. Exemptions J ZIP code Checking a box below will not change your tax or refund. San Diego, CA 92000 A Check here if you, or your spouse if filing jointly, want $3 to go to this fund? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 2 3 Single 4 X Married filing jointly (even if only one had income) Married filing separately. Enter spouse's SSN above & full name here. . G 6a b 5 G (2) Dependent's social security number (1) First name Little JJ UCSD Sam UCSD You Spouse Head of household (with qualifying person). (See instructions.) If the qualifying person is a child but not your dependent, enter this child's name here G Qualifying widow(er) with dependent child X Yourself. If someone can claim you as a dependent, do not check box 6a. . . . . . . . . . . X Spouse . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . c Dependents: If more than four dependents, see instructions and check here. . . G State (3) Dependent's relationship to you Last name 999-99-9997 Son 999-99-9996 Son Boxes checked on 6a and 6b. . . No. of children (4) if on 6c who: child under ? lived age 17 qualifying for with you. . . . . . child tax cr ? did not (see instrs) live with you due to divorce or separation (see instrs). . . . Dependents on 6c not entered above. . 2 b 2 X X Add numbers on lines d Total number of exemptions claimed. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . above. . . . . G 4 7 Wages, salaries, tips, etc. Attach Form(s) W-2. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 86,000. Income 8 a Taxable interest. Attach Schedule B if required . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8a 754. b Tax-exempt interest. Do not include on line 8a . . . . . . . . . . . . . 8b 9 a Ordinary dividends. Attach Schedule B if required. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9a Attach Form(s) W-2 here. Also b Qualified dividends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9b attach Forms 10 Taxable refunds, credits, or offsets of state and local income taxes . . . . . . . . . . . . . . . . . . . . . 10 480. W-2G and 1099-R 11 Alimony received . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 if tax was withheld. 12 Business income or (loss). Attach Schedule C or C-EZ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 If you did not 13 Capital gain or (loss). Att Sch D if reqd. If not reqd, ck here . . . . . . . . . . . . . . . . . . . . . . . . . G 13 get a W-2, see instructions. 14 Other gains or (losses). Attach Form 4797. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 15 a IRA distributions. . . . . . . . . . . . . 15 a b Taxable amount. . . . . . . . . . . . . 15 b 16 a Pensions and annuities . . . . . . 16 a b Taxable amount. . . . . . . . . . . . . 16 b 17 Rental real estate, royalties, partnerships, S corporations, trusts, etc. Attach Schedule E. 17 18 Farm income or (loss). Attach Schedule F. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 Enclose, but do not attach, any 19 Unemployment compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19 payment. Also, 20 a Social security benefits . . . . . . . . . . . 20 a b Taxable amount. . . . . . . . . . . . . 20 b please use Form 1040-V. 21 Other income 21 22 Combine the amounts in the far right column for lines 7 through 21. This is your total income. . . . . . . . . . . . . G 22 87,234. 23 Educator expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23 Adjusted 24 Certain business expenses of reservists, performing artists, and fee-basis government officials. Attach Form 2106 or 2106-EZ . . . . . . . . . . . . . . . . . . . . 24 Gross Income 25 Health savings account deduction. Attach Form 8889. . . . . . . . 25 26 Moving expenses. Attach Form 3903 . . . . . . . . . . . . . . . . . . . . . . . 26 27 One-half of self-employment tax. Attach Schedule SE. . . . . . . 27 28 Self-employed SEP, SIMPLE, and qualified plans. . . . . . . . . . . 28 29 Self-employed health insurance deduction. . . . . . . . . . . . . . . . . . 29 30 Penalty on early withdrawal of savings . . . . . . . . . . . . . . . . . . . . . 30 31 a Alimony paid b Recipient's SSN . . . . G ... 31 a 32 IRA deduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32 33 Student loan interest deduction. . . . . . . . . . . . . . . . . . . . . . . . . . . . 33 34 Tuition and fees. Attach Form 8917 . . . . . . . . . . . . . . . . . . . . . . . . 34 35 Domestic production activities deduction. Attach Form 8903. . . . . . . . . . . . . . 35 36 Add lines 23 - 31a and 32 - 35. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36 0. 37 Subtract line 36 from line 22. This is your adjusted gross income . . . . . . . . . . . . . . . . . . . . G 37 . 87,234. BAA For Disclosure, Privacy Act, and Paperwork Reduction Act Notice, see separate instructions. FDIA0112L 12/22/10 Form 1040 (2010) John and Jane UCSD Form 1040 (2010) Tax and Credits Other Taxes Payments If you have a qualifying child, attach Schedule EIC. Refund Direct deposit? See instructions. Amount You Owe Third Party Designee Sign Here Joint return? See instructions. Keep a copy for your records. 53 Other crs from Form: a 3800 b 8801 c 53 54 Add lines 47 through 53. These are your total credits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55 Subtract line 54 from line 46. If line 54 is more than line 46, enter -0-. . . . . . . . . . . . . . . . . G 56 Self-employment tax. Attach Schedule SE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57 Unreported social security and Medicare tax from Form: a 4137 b 8919. . . . . . . . . . . . . . . . . . . . . . . 58 Additional tax on IRAs, other qualified retirement plans, etc. Attach Form 5329 if required. . . . . . . . . . . . . . . . . . . 59 a Form(s) W-2, box 9 b Schedule H c Form 5405, line 16. . . . . 60 Add lines 55-59. This is your total tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . G 61 Federal income tax withheld from Forms W-2 and 1099 . . . . . 61 . 7,290. 62 2010 estimated tax payments and amount applied from 2009 return . . . . . . . . 62 63 Making work pay credit. Attach Schedule M. . . . . . . . . . . . . . . . . 63 64 a Earned income credit (EIC) . . . . . . . . . . . . . . . . . . . . . . . . . . . . .No 64 a . .. b Nontaxable combat pay election . . . . . G 64 b 65 Additional child tax credit. Attach Form 8812 . . . . . . . . . . . . . . . 65 . 66 American opportunity credit from Form 8863, line 14. . . . . . . . 66 67 First-time homebuyer credit from Form 5405, line 10. . . . . . . . 67 68 Amount paid with request for extension to file . . . . . . . . . . . . . . 68 69 Excess social security and tier 1 RRTA tax withheld. . . . . . . . . 69 70 Credit for federal tax on fuels. Attach Form 4136. . . . . . . . . . . . 70 71 Credits from Form: a 2439 b 8839 c 8801 d 8885 . 71 72 Add lns 61-63, 64a, & 65-71. These are your total pmts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . G 73 If line 72 is more than line 60, subtract line 60 from line 72. This is the amount you overpaid . . . . . . . . . . . . . . . 74 a Amount of line 73 you want refunded to you. If Form 8888 is attached, check here. G G b Routing number . . . . . . . . XXXXXXXXXX G c Type: Checking Savings G d Account number . . . . . . . . XXXXXXXXXXXXXXXXXXXXXXXX 75 Amount of line 73 you want applied to your 2011 estimated tax. . . . . . . . G 75 76 Amount you owe. Subtract line 72 from line 60. For details on how to pay see instructions . . . . . . . . . . . . . . . G 77 Estimated tax penalty (see instructions). . . . . . . . . . . . . . . . . . . . 77 Do you want to allow another person to discuss this return with the IRS (see instructions)?. . . . . . . . . . . Designee's name Phone no. G Page 2 38 87,234. 40 41 42 21,117. 66,117. 14,600. 43 51,517. 44 45 46 6,891. 0. 6,891. 54 55 56 57 58 59 60 2,000. 4,891. 72 73 74 a 7,290. 2,399. 2,399. 4,891. 76 X No Yes. Complete below. Personal identification number (PIN) G G Under penalties of perjury, I declare that I have examined this return and accompanying schedules and statements, and to the best of my knowledge and belief, they are true, correct, and complete. Declaration of preparer (other than taxpayer) is based on all information of which preparer has any knowledge. A A Your signature Date Your occupation Daytime phone number CPA Spouse's signature. If a joint return, both must sign. Print/Type preparer's name Paid Preparer's Use Only 999-99-9999 38 Amount from line 37 (adjusted gross income). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39 a Check You were born before January 2, 1946, Blind. Total boxes if: Spouse was born before January 2, 1946, Blind. checked G 39 a b If your spouse itemizes on a separate return, or you were a dual-status alien, check here. . . . . . . . G 39 b 40 Itemized deductions (from Schedule A) or your standard deduction (see instructions) . . . . . . . . . . . . . . . . . . . . 41 Subtract line 40 from line 38. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42 Exemptions. Multiply $3,650 by the number on line 6d . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43 Taxable income. Subtract line 42 from line 41. If line 42 is more than line 41, enter -0- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44 Tax (see instrs). Check if any tax is from: a Form(s) 8814 b Form 4972 . . . . . . . . . . . . . . . . . . . . . . . . . . . 45 Alternative minimum tax (see instructions). Attach Form 6251. . . . . . . . . . . . . . . . . . . . . . . . . . 46 Add lines 44 and 45. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . G 47 Foreign tax credit. Attach Form 1116 if required . . . . . . . . . . . . 47 . 48 Credit for child and dependent care expenses. Attach Form 2441 . . . . . . . . . . 48 49 Education credits from Form 8863, line 23. . . . . . . . . . . . . . . . . . 49 50 Retirement savings contributions credit. Attach Form 8880. . . 50 51 Child tax credit (see instructions) . . . . . . . . . . . . . . . . . . . . . . . . . . 51 2,000. 52 Residential energy credits. Attach Form 5695. . . . . . . . . . . . . . . 52 Date Spouse's occupation CPA Preparer's signature Date Self-Prepared G Firm's address G 3/30/11 Check if PTIN self-employed Firm's name Firm's EIN G Phone no. Form 1040 (2010) FDIA0112L 12/22/10 SCHEDULE A Department of the Treasury Internal Revenue Service OMB No. 1545-0074 Itemized Deductions (Form 1040) (99) G Attach to Form 1040. 2010 Attachment Sequence No. G See Instructions for Schedule A (Form 1040). Name(s) shown on Form 1040 John and Jane UCSD 07 Your social security number 999-99-9999 Medical and Dental Expenses Caution. Do not include expenses reimbursed or paid by others. 1 Medical and dental expenses (see instructions) . . . . . . . . . . . . . . . . . . . . . . . . . . 1 2 Enter amount from Form 1040, line 38. . . . . . 2 3 Multiply line 2 by 7.5% (.075) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 4 Subtract line 3 from line 1. If line 3 is more than line 1, enter -0-. . . . . . . . . . . . . . . . . . . . . . . . . . . 5 State and local (check only one box): a X Income taxes, or ................................ 5 4,322. b General sales taxes 6 Real estate taxes (see instructions). . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 2,300. 7 New motor vehicle taxes from line 11 of the worksheet on page 2 (for certain vehicles purchased in 2009). Skip this line if you checked box 5b . . . . . . . . . . . . . 7 8 Other taxes. List type and amount G Personal Property Taxes 450. 8 450. 9 Add lines 5 through 8. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 Home mtg interest and points reported to you on Form 1098. . . . . . . . . . . . . . . . . 10 13,200. 11 Home mortgage interest not reported to you on Form 1098. If paid to the person from whom you bought the home, see instructions and show that person's name, identifying number, and address G 4 0. 9 7,072. 15 13,200. 19 740. 20 Casualty or theft loss(es). Attach Form 4684. (See instructions.). . . . . . . . . . . . . . . . . . . . . . . . . . . . 20 Job Expenses 21 Unreimbursed employee expenses ' job travel, union dues, job education, etc. Attach Form 2106 or 2106-EZ if and Certain Miscellaneous required. (See instructions.) G Deductions Form 2106 (Taxpayer) 1,850. 21 1,850. 22 Tax preparation fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22 23 Other expenses ' investment, safe deposit box, etc. List type and amount G 23 24 Add lines 21 through 23 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24 . 1,850. 25 Enter amount from Form 1040, line 38. . . . . . 25 87,234. 26 Multiply line 25 by 2% (.02) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26 1,745. 27 Subtract line 26 from line 24. If line 26 is more than line 24, enter -0- . . . . . . . . . . . . . . . . . . . . . . 27 28 Other ' from list in instructions. List type and amount G Other Miscellaneous Deductions 28 0. Taxes You Paid Interest You Paid Note. Your mortgage interest deduction may be limited (see instrs). 11 12 Points not reported to you on Form 1098. See instrs for spcl rules . . . . . . . . . . . . 12 . 13 Mortgage insurance premiums (see instructions) . . . . . . . . . . . . . . . 13 14 Investment interest. Attach Form 4952 if required. (See instrs.). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 15 Add lines 10 through 14 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Gifts to Charity 16 Gifts by cash or check. If you made any gift of $250 or more, see instrs. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . If you made a gift and got a benefit for it, see instructions. 17 Other than by cash or check. If any gift of $250 or more, see instructions. You must attach Form 8283 if over $500. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 18 Carryover from prior year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 19 Add lines 16 through 18 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 740. 16 Casualty and Theft Losses Total Itemized Deductions 29 Add the amounts in the far right column for lines 4 through 28. Also, enter this amount on Form 1040, line 40 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30 If you elect to itemize deductions even though they are less than your standard deduction, check here . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . BAA For Paperwork Reduction Act Notice, see Form 1040 instructions. FDIA0301L 12/21/10 29 105. 0. 21,117. G Schedule A (Form 1040) 2010 Form 2106-EZ Department of the Treasury Internal Revenue Service OMB No. 1545-0074 Unreimbursed Employee Business Expenses (99) 2010 Attachment Sequence No. G Attach to Form 1040 or Form 1040NR. Your name Occupation in which you incurred expenses John UCSD CPA 129A Social security number 999-99-9999 You Can Use This Form Only if All of the Following Apply. ? You are an employee deducting ordinary and necessary expenses attributable to your job. An ordinary expense is one that is common and accepted in your field of trade, business, or profession. A necessary expense is one that is helpful and appropriate for your business. An expense does not have to be required to be considered necessary. ? You do not get reimbursed by your employer for any expenses (amounts your employer included in box 1 of your Form W-2 are not considered reimbursements for this purpose). ? If you are claiming vehicle expense, you are using the standard mileage rate for 2010. Caution: You can use the standard mileage rate for 2010 only if: (a) you owned the vehicle and used the standard mileage rate for the first year you placed the vehicle in service, or (b) you leased the vehicle and used the standard mileage rate for the portion of the lease period after 1997. Part I Figure Your Expenses 1 Vehicle expense using the standard mileage rate. Complete Part II and multiply line 8a by 50f (.50). . . . . . . . 1 2 Parking fees, tolls, and transportation, including train, bus, etc, that did not involve overnight travel or commuting to and from work . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 3 Travel expense while away from home overnight, including lodging, airplane, car rental, etc. Do not include meals and entertainment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 4 Business expenses not included on lines 1 through 3. Do not include meals and entertainment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 5 Meals and entertainment expenses: $ x 50% (.50) (Employees subject to Department of Transportation (DOT) hours of service limits: Multiply meal expenses incurred while away from home on business by 80% (.80) instead of 50%. For details, see instructions.). . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 6 Total expenses. Add lines 1 through 5. Enter here and on Schedule A (Form 1040), line 21 (or on Schedule A (Form 1040NR), line 9). (Armed Forces reservists, fee-basis state or local government officials, qualified performing artists, and individuals with disabilities: See the instructions for special rules on where to enter this amount.) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 1,850. 1,850. Part II Information on Your Vehicle. Complete this part only if you are claiming vehicle expense on line 1. 7 When did you place your vehicle in service for business use? (month, day, year). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . G 8 Of the total number of miles you drove your vehicle during 2010, enter the number of miles you used your vehicle for: a Business b Commuting (see instr) c Other 9 Was your vehicle available for personal use during off-duty hours? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Yes No 10 Do you (or your spouse) have another vehicle available for personal use? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Yes No 11 a Do you have evidence to support your deduction?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Yes No b If 'Yes,' is the evidence written? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . BAA For Paperwork Reduction Act Notice, see your tax return instructions. FDIA7501L 06/28/10 Yes No Form 2106-EZ (2010) ...
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This note was uploaded on 10/16/2011 for the course MGT 134 taught by Professor Housekeeper during the Fall '11 term at UCSD.

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