Reference no: EM132759373
Siena is 38 years old and unmarried.
- Siena had her first child, Wilson, in June 2020.
- Quincy, Siena's brother, moved in with her in May to help her out around the house. Quincy was unemployed for most of the year, but received a Form W-2 for $4,578 in wages.
This year, Siena had the following expenses:
- Mortgage interest, mortgage insurance, and real estate tax reported on Form 1098
- Personal property tax of $250 - Medical expenses of $1,500
- Cash contributions to charity of $1,600 - Clothing and furniture in good used condition with fair market value (FMV) of $300
- Unreimbursed mileage driven for work at the standard mileage rate = $1,350 - Renovations made to Wilson's nursery for $500
- Siena received a Form 1099-R for a distribution from her IRA that she took shortly after Wilson's birth to pay for his expenses.
- Siena paid all the costs of keeping up the home and support for both Quincy and Wilson.
- Siena received an Economic Impact Payment (EIP) of $1,200 in 2020.
- Siena, Quincy, and Wilson are all U.S. citizens and have valid Social Security numbers.
Problem 1: Siena has the option to recontribute any portion of the IRA distribution that she took to pay for Wilson's expenses as a rollover contribution. T/F
Problem 2: How many dependents may Siena claim?
A. 0, neither Wilson nor Quincy qualifies
B. 1, only Wilson qualifies
C. 1, only Quincy qualifies
D. 2, both Wilson and Quincy qualify
Problem 3: What is Siena's standard or itemized deduction on her tax return? $________.
Problem 4: Siena must pay an additional tax on the early withdrawal from her IRA of:
A. $0
B. $270
C. $300
D. $450