Prepare their federal income tax return in good form

Assignment Help Accounting Basics

Reference no: EM131297675

Noah and Joan Arc live with their family at 4342 Josie Jo, Santee, CA 92071. Noah's Social Security number is 434-11-3311; Joan's is 456-87-5432. Both are in their mid-30s and enjoy good health and eyesight. Noah owns and operates a pet store and Joan is a firefighter for the city.

1. The Arcs have two children, a son named Billie Bob (Social Security number 598-01-2345), who is 7 years old, and a daughter named Mary Sue (Social Security number 554-33-2411), who is 4 years old. The Arcs paid $3,200 to the Roundup Day Care Center to take care of Mary Sue while they worked. Because Joan is a firefighter, she was home in the afternoon to care for Billie Bob after school.

2. For the current year, Joan's W-2 from the city fire department is located below. Noah made estimated federal income tax payments of $12,000 and estimated state income tax payments of $1,020 during the current year.

a Employee's social security number456-87-5432

OMB No. 1545-0008

Safe, accurate,
FAST! Use

^IRS e ~ file

Visit the IRS website at
www.irs.gov/efile

Employer identification number (EIN)
33-4382966

Wages, tips, other compensation
27,600.00

Federal income tax withheld
5,050.00

Employer's name, address, and ZIP code
Santee Fire Department
Santee, CA 92071

Social security wages
27,600.00

Social security tax withheld
1,711.20

Medicare wages and tips
27,600.00

Medicare tax withheld
400.20

Social security tips

Allocated tips

Control number

Dependent care benefits

Employee's first name and initial

Last name

Suff.

Nonqualified plans

12a

See instructions for box 12

C
o
d
e

Joan Arc
4342 Josie Jo
Santee, CA 92071

Statutory employee	Retirement plan	Third-party sick pay
?	?	?

12b

C
o
d
e

Other

12c

C
o
d
e

12d

C
o
d
e

Employee's address and ZIP code

State

Employer's state ID number

State wages, tips, etc.

State income tax

Local wages, tips, etc.

Local income tax

Locality name

1126-87021

27,600.00

1,240.00

Form W-2 Wage and Tax Statement	2015	Department of the Treasury-Internal Revenue Service
Copy B-To Be Filed With Employee's FEDERAL Tax Return. This information is being furnished to the Internal Revenue Service.

3. Noah's pet store is located at 18542 Mission Road, Santee, CA 92071. The name of the store is ''The Arc,'' and its taxpayer ID number is 95-9876556. The beginning inventories and ending inventories are both $10,000. The revenue and expenses for the year are as follows:

Sales revenue (merchant card sales)		$ 144,300
Expenses:
Cost of sales	$61,900
Insurance	780
Accounting fees	1,800
Wages	25,100
Payroll taxes	2,250
Business meals (total)	$400
Utilities	2,650
Rental expense	7,600

4. Noah and Joan paid the following amounts during the year (all by check):

Political contributions	$250
Church donations (for which a written acknowledgment was received)	2,700
Real estate taxes on their home	1,350
Mortgage interest for purchase of home	11,100
Tax return preparation fees	350
Credit card interest	220
Automobile insurance premiums	600
Uniforms for Joan	125

5. Noah likes to invest in the stock market. His Form 1099-B showed the following information for Noah's stock sales:

*Stock*	*Date Acquired*	*Date Sold*	*Sales Price*		*Cost Basis*
Blue Co.	02/11/05	08/15/15	$4,500	$2,400
Yellow Co.	01/31/15	06/05/15	6,000	5,300
Red Co.	10/02/06	10/07/15	12,200	1,600

The expenses of sale are included in the cost basis. Noah has a long-term capital loss carryover from last year of $2,300.

6. During the year, Noah and Joan received the following qualifying dividends:

Exxon	$302
Texas Utilities	220
Coca-Cola	320

All stocks, bonds, and savings accounts were purchased or established with community property.

7. Noah and Joan own rental property (a single family residence) located at 6431 Gary Ct., San Diego, CA 92115. The revenue and expenses for the year are as follows:

Rent income	13,800
Insurance	$575
Interest expense	6,870
Property taxes	1,000
Miscellaneous expenses	600
Depreciation (the house was acquired in 1991)	3,000

8. All members of the Arc household were covered for the entire year under health care insurance through Joan's employer.

Required: Although Noah and Joan do not believe their tax return will be unduly complicated, they do realize their limitations and come to you for assistance. You are to prepare their federal income tax return in good form, signing the return as the preparer. You are not required to complete a California state income tax return. Noah and Joan have completed a tax organizer and have also given you several IRS forms (see 1099-DIV, 1099-MISC and 1098) that they were not sure what to do with. Make realistic assumptions about any missing data (addresses, etc.) that you may need. The following forms and schedules are required:

Form 1040	Schedule E
Schedule A	Schedule SE
Schedule B	Form 2441
Schedule C	Form 8949
Schedule D	Qualified Dividends and Capital Gain Tax Worksheet

Note: Only page 1 of Schedule E is required.

If required, enter a "loss" as a negative number on the tax form. Do not enter deductions as negative numbers. If an amount box does not require an entry or the answer is zero, enter "0". If required, round your answers to the nearest dollar. However, on Schedule SE, use the rounded amounts in subsequent computations.

Attachment:- Assignment.rar

Reference no: EM131297675

Questions Cloud

Define antidependancy with the help of suitable example : ADVANCED COMPUTER ARCHITECTURE - [CS-801] Find the accuracy rate of 2bit prediction for the following actual output sequence T T T T T NT NT NT.assume the initial prediction bit is 00 and define antidependancy with the help of suitable example.

What was delta’s payout ratio for fiscal year : Delta corp. earned 2.50 per share during the fiscal year 2011 and paid cash dividends of $1.00 per share. During the fiscal year that just ended on December 31 2012. Delta earned $ 3.00 per share, and the firm’s manager except to earn this amount per..

What are the ethical issues the firm should consider : Suppose that a firm has a production location in a small town in the United States, but discovers that it could lower costs substantially by closing the plant in the United States and relocating production to Mexico.- What are the ethical issues t..

Teach the students about business ethics : UMUC wants to use a new tutorial to teach the students about business ethics. As an experiment the administrator randomly selected 15 students and randomly assigned them to one of three groups which include either a PowerPoint presentation created..

Prepare their federal income tax return in good form : Although Noah and Joan do not believe their tax return will be unduly complicated, they do realize their limitations and come to you for assistance. You are to prepare their federal income tax return in good form, signing the return as the prepare..

What are the advantages and disadvantages of doing so : Assume you are the manager of a firm that is considering outsourcing some of the manufacturing currently being conducted on site.- What are the advantages and disadvantages of doing so?

What marketing strategy should be considered : What marketing strategy should be considered? What are the best communication strategies and why? What is the best timing of entry? How would it impact their market growth?

Describe a use case dependency for making an account deposit : Describe (in a one to two (1-2) page narrative) a use case dependency for making an account transfer. Illustrate this use case with Visio or a similar product.Identify and explain at least one (1) ethical issue that the use case exposes in connect..

Tradeoff involved in determining size of facilities for chc : The cost of land is much higher in the middle of the city than it is on the outskirts of the city where College Health Club (CHC) is located. How does this affect CHC's expenses?

User Account

All Pages