Sign into your ProConnect Tax account and from the Welcome screen, select Tax Returns in the left
Question:
Sign into your ProConnect Tax account and from the Welcome screen, select Tax Returns in the left margin. You will land on the Tax Returns 2020 page. Select Create tax return in the upper right corner
From the Create tax return screen, click the [+] for Add new and select the Individual (1040, 709) button (it is selected as the default). Fill out the information for David. Note that ProConnect Tax tracks a married filing jointly client by one taxpayer and so often the primary income earning taxpayer is entered as the default since many of the input fields will default to that taxpayer. Email and phone numbers are not required but you may enter assumed data if you wish. Click on Save at the lower right. On the next screen Client, you may review the information you input, make any corrections necessary through the Edit button on the upper right, and once satisfied, click on Save at the lower right.
You have now landed on David’s 1040 Profile page. You may unselect the Select for E-file for the Federal line and the California line under General since you will not actually be filing the tax return, but it is not required to do so. To avoid confusion related to the state income tax return, you may delete the California state income tax return by clicking the garbage can icon under the Actions column and selecting continue to confirm the deletion. From the tabs near the top, select Input Return. From the menu at the left, select General; Client Information. The Filing Status will appear on the right. Change filing status to 2=Married filing jointly. Check the Live With Spouse? box. Scroll down this page and enter the Occupation for David and the Spouse Information for Darlene (first name, Social Security number, occupation, and birthdate). Continue to scroll down through this page and toward the bottom, under Miscellaneous Info, find Prepared by and select 3 = Self-Prepared. From the menu at the left, select General; Dependents. You will now see the General Information tab on the right. Enter the information you have for Sam. Select 1=Child living with taxpayer for Type. You may leave Earned Income Credit and Child Tax Credit at 1=When applicable.
From the menu at the left, select Income; Wages, Salaries, Tips (W-2). See the New Tab to the right and click on the icon that looks like a sheet of paper, to the left of New Tab. This action takes you to the Quick Entry: Wages, Salaries, Tips screen. Enter the amounts for David’s wages, federal income tax withheld, and state income tax withheld (box 17). Add Darlene’s wages and income taxes withheld in a similar manner. Check the box for Spouse. For the interest income, from the menu at the left, select Income; Interest Income (1099-INT, 1099-OID). For the taxable bond interest, enter the Name of Payer and enter the amount for Banks, S&L, etc.
To enter the itemized deduction items, from the menu at the left, select Deductions; Itemized Deductions (Sch A). Select the appropriate tab across the top and enter the itemized deduction amount for each type (e.g., medical expenses under the Medical tab and real estate taxes under the Taxes tab). Under the Taxes tab, scroll down to Income Taxes; State and enter the appropriate amount in the 1/20 payment on 2019 state estimate box. Continue to scroll down to Sales and Use Taxes; Actual Taxes Paid; State and local sales taxes (except autos and special items) to enter the general state sales tax for 2020. Continue to scroll down to Real Estate Taxes; Principal residence and enter the property taxes on personal residence. Once complete, select the Interest menu item at the top and scroll down to the Home mortgage interest & points on Form 1098 [Adjust] (Click on button to expand) and enter the home acquisition mortgage interest expense. Interest expense paid on credit card debt is not tax deductible.
After entering in the information, you shall see that the total itemized deductions are less than the $24,800 standard deduction and thus the Jaspers will take the standard deduction instead of itemizing. As a result, go back into the Contributions tab of the Itemized Deductions (Sch A) section and check the box for Deduct cash charitable contributions if taking the standard deduction (forces the standard deduction). ProConnect Tax will then generate the maximum $300 charitable contribution deduction on Line 10 of the Form 1040 since the Jasper’s charitable contributions exceeded $300 and they are taking the standard deduction. For the IRA contribution, from the menu at the left, select Deductions; Adjustments to Income. Enter the amounts for IRA contribution for David in the Taxpayer column. To get a credit for Sam’s day care expenses, from the menu at the left, select Credits; Dependent Care Credit (2441); Children, Dependents and enter the information about Sam, including the Qualified dependent care expense incurred and paid in 2020 (MANDATORY). From the menu at the left, select Care Providers and enter the information about Kiddiecare Inc. To enter the EIN, select EIN from the drop-down list, and then enter it. Enter the Total amount paid to care provider in 2020 for all dependents. Under the Credits menu at the left, scroll down to Recovery Rebate, EIC, Residential Energy, Oth Credits. The tabs across the top are used to input the different types of credits. Select the Recovery Rebate Credit tab (the first tab and the default) and enter the appropriate amount of the EIP received by the taxpayer in the Economic impact payment 1 box under the Taxpayer column and the appropriate amount of the EIP received by the spouse under the Spouse column. Because an additional EIP was authorized in late 2020, you should ask your instructor whether to enter the additional EIP of $600 or to enter -1 in the Economic Impact 2 box. From the menu at the top, select File Return. From the menu at the left, under Print, select View/Print Return PDF. Click the blue Create PDF button which will result in a Download Return PDF blue button that you should click on. The return should open in a new tab. Review the return and if corrections are needed, close out of the tab and you can go back into the return and make the necessary corrections. Once complete, follow the File Return instructions again and then download the return by clicking on the download icon in the upper right corner, to the left of the print icon. Remember where you save the tax return. Close the PDF.
David and Darlene Jasper have one child, Sam, who is 6 years old (birthdate July 1, 2014). The Jaspers reside at 4639 Honeysuckle Lane, Los Angeles, CA 90248. David’s Social Security number is 577-11-3311, Darlene’s is 477-98-4731, and Sam’s is 589-22-1142. David’s birthdate is May 29, 1987 and Darlene’s birthday is January 31, 1989. David and Darlene’s earnings and withholdings for 2020 are:
David:
Earnings from Apple Company (office manager)
$26,750
Federal income tax withheld
800
State income tax withheld
1,050
Darlene:
Earnings from Rose Company (perfume tester)
$26,200
Federal income tax withheld
1,050
State income tax withheld
1,000
Their other income includes interest from Pine Tree Savings and Loan of $950. Other information and expenditures for 2020 are as follows:
Interest:
On home acquisition mortgage
$11,300
Credit card
925
Taxes:
Property taxes on personal residence
1,300
State income taxes paid in 2020 (for 2019)
300
Contribution (with written acknowledgement) to church
1,045
Medical insurance
675
Medical and dental expenses
6,175
Income tax return preparation fee paid in 2020
200
Actual general state sales tax for 2020
1,016
Payment of union dues
225
Contribution to David’s IRA (no retirement plan at his work)
500
The Jaspers received a $2,900 EIP in 2020.
David and Darlene received the following letter from Sam’s daycare provider:
Required: Complete the Jaspers’ federal tax return for 2020. Use Form 1040, Schedule 1, Schedule 3, Schedule A, Form 2441, and Form 8880, as needed. Make realistic assumptions about any missing data.
