Reference no: EM134939
Prepare a 2012 tax return using the following information. Forms 1040, Schedule A, Schedule B, Schedule C, Schedule SE (only need to complete page 1), Form 4562.
Joe and Sheri Foley, ages 40 and 41, are married and live at 140 Lafayette Street, Salem, MA 01970. Joe's social security number is 201-94-1245 and Sheri's is 374-41-2145. The Foley's have 2 children: Haley, age 10 and Jack, age 22. Their social security numbers are 200-30-4123 and 123-40-5409, respectively. Jack is looking for a job and lives at home and earned only $2,000 in 2012.
Joe works at Salem Hospital and has a salary of $110,000, Federal withholdings of $19,500, and state withholdings of $7,000. On March 5, 2013 he contributed $5,000 to a deductible IRA.
Sheri is a self-employed IT consultant and works out of an office at 200 Canal Street, Salem, MA 01970. She had gross income of $100,000 and her expenses were as follows:
Part-time Secretary's salary $20,000
Supplies 1,500
Printing expenses 100
Postage 600
Professional insurance 540
Office rent 12,000
She also bought a computer for $5,000 and furniture for $13,000. The computer is five-year life property and the furniture is 7 year property and both assets were purchased during the second quarter of the year. She does not elect section 179 depreciation but does take 50% bonus depreciation on both assets. On December 30, 2012 Sheri made a deductible IRA contribution of $5,000. She made estimated tax payment in 2011 as follows: Federal, $10,000 and Massachusetts, $5,000.
Joe and Sheri had the following personal expenses:
Prescriptions $5,000
Cash donations to church 7,000
Real estate taxes 14,400
Auto excise tax on personal cars 400
Political contributions 900
Credit card interest 150
Mortgage interest 12,000
The couple also gets interest from a savings account at Eastern Bank, $1,000.
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