. You must use the 2022 versions of the tax forms. It is recommended that you refer...

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Question:

.You must use the 2022 versions of the tax forms.It is recommended that you refer to the instructions for Form 1040, the schedules, and the additional forms that are available on the IRS Website.

You must hand in the following forms and schedules (2022 versions), even if Stanley and Joanna would not be required to submit them as part of their tax return.

(1) Form 1040: U.S. Individual Income Tax Return [20 points]-Show any calculations you do that are not shown directly on the form on a separate sheet of paper (for example, Social Security, annuity, QBI deduction, tax calculation, child tax credit or credit for other dependents).Use Form 1040 for this assignment. Do not use Form 1040-SR.

(2) Schedule 1 (Form 1040): Additional Income and Adjustments to Income [5 points]

(3) Schedule 2 (Form 1040): Additional Taxes [5 points]

(4) Schedule A (Form 1040): Itemized Deductions [10 points]

(5) Schedule B (Form 1040): Interest and Ordinary Dividends [5 points]

(6) Schedule C (Form 1040): Profit or Loss From Business (Include the proper business code for the business from the Schedule C instructions-you can find this on the IRS website in the 2022 instructions; also show calculations, such as car and truck expenses) [15 points]

(7) Schedule SE (Form 1040): Self-Employment Tax (show calculations on a separate sheet) [5 points]

(8) Form 4562: Depreciation and Amortization [10 points]-Show any calculations you do that are not shown directly on the form on a separate sheet of paper (for example, the calculations for MACRS depreciation)

Do not use any computer software to prepare the tax return!

Use the following information to complete the tax return

(1) Stanley A. Bailey was born on September 1, 1958, and his social security number is 222-33- 3344. Joanna B. Bailey was born on March 1, 1949, and her social security number is 444- 33-4444. Stanley and Joanna reside at 1000 South Street, Moline, IL 61265. Their daytime phone number is (563)555-1234.

(2) Stanley and Joanna are calendar-year taxpayers, are married, and wish to file a joint return.

(3) Stanley and Joanna supported the following individuals during the year:

Becky Bailey-Daughter, single, social security number 888-33-2222, born October

8, 1992. Becky is a part-time student at Scott Community College. Stanley and Joanna provided 75 percent of her support, and Becky provided the rest. Becky'sincome consisted of wages totaling $2,500 earned from a part-time job. She lived with Stanley and Joanna for the entire year.

Jackson Bailey-Grandson, single, social security number 888-22-1111, born April 12, 2004. Jackson was a full-time student at Moline High School, Jackson lived all year with Stanley and Joanna, and they provided 100 percentof Jackson's support.

Thomas Bailey- Stanley'sbrother, single, social security number 333-11-8888, born September 1, 1960. Thomas lived in Springfield, IL, during the year. Stanley and Joanna provided 65 percent of Thomas's support, and his income consisted of $8,000 from a part-time job.

(4) Information relating to Stanley andJoanna's2021 Federal income tax return:

Stanley and Joanna claimed the standard deduction on their 2021 Federal income tax

return.

Stanley and Joanna applied their $3,000 refund for 2021 to their 2022 estimated tax

when they filed their 2021 Federal income tax return.

(5) Joanna ?Income from a part-time job at ABC Grocery Store:Use your assigned numbers for

is retired. However, she receives income from the following sources.

Box 1 ( Wage $7300) and Box 2 (Federal income tax withheld is $730) listed on Blackboard.In addition, Joanna had $1,000 state income taxes withheld for Illinois. You do not need any of the other numbers from the W-2 to complete the tax return.

Joanna received $30,000 of Social Security benefits during 2022.

Joanna purchased an ordinary life annuity (one life) in 2018 when she was 69 years

old for $50,000. She began receiving annuity payments of $600 per month on July 1, 2022, and she received 6 monthly payments during 2022.

(6) Stanley is the sole owner and manager of Rapid Appliance Repair, an unincorporated business that provides appliance repair and maintenance services. He started his business on

January 1, 2008. The business is located at 100 53rd Street, East Moline, IL 61244. Stanley is at risk for all loss operations. His Employer Identification Number (EIN) is 36-1234567. (Hint: Look up the code for box B in the instructions!)

Rapid Appliance Repair uses the cash receipts method of accounting.

Rapid Appliance Repair did not make any payments that would require filing Form

1099.

Rapid Appliance Repair had the following cash receipts for calendar year 2022:

?Sales $198,000

Rapid Appliance Repair paid the following expenses for calendar year 2022:

? Advertising : $1500

? Insurance for the building/business (fire, flood, etc.) : $12000

? Maintenance 1000

? Office Expense. 2000

? Supplies. 25000

? Utilities 12000

? Wages for employees 50000

Rapid Appliance Repair does not have any merchandise inventory.

During 2022, Rapid Appliance Repair purchased and placed into service the

following assets:

Description of Property Date Placed into Service

Office Furniture 3/1/2022

Stanley does not wish to claim a Section 179 deduction or any bonus depreciation that

is available for 2022.

Depreciable property that Rapid Appliance Repair purchased and placed into service

Purchase Price Use

Business $6,500 100%

prior to 2022 consisted of the following:

Description of Property $200,000

Building for Business Computer System

Date Placed into Service 1/1/2008 4/9/2020

Purchase Price Use

$200,000 100% $1,000 100%

Business

Stanley did not claim a Section 179 deduction or any bonus depreciation for these assets when they were purchased. In addition, he did not elect any alternative methods. He only used the MACRS method to depreciate the assets.

?Stanley owns a van that he uses 100% for business use. He chose to use the standard mileage rate for automobile expenses. The van was driven 2,000 miles each month, for a total of 24,000 miles during 2022. None of the miles were for personal or commuting use, the van was not available during off-duty hours, and he had another vehicle that he used for personal use. Gasoline for the van cost $8,500. Routine maintenance on the van (oil changes, etc.) cost $2,000. Other costs, such as insurance and registration for the van cost $1,750 for 2022.

Stanley has written documentation supporting the business use for all of the property.

Appliance repair is not a specified service business for the QBI deduction.Do not

forget the QBI deduction on the tax return!

(7) Stanley and Joanna received the following interest income during the year.

$375 interest income on their savings account at Blackhawk Bank & Trust.

$500 of interest income on a certificate of deposit at Wells Fargo Bank.

$1,500 from a City of Chicago bond.

(8) Stanley and Joanna received the following ordinary dividends during the year. All of the dividends were qualified dividends.

$1,200 from Deere & Co.

$750 from AT&T, Inc.

(9) Stanley and Joanna paid the following personal expenditures during 2022:

$15,200 of unreimbursed medical expenses.

$8,500 home mortgage interest reported on Form 1098

$12,000 property taxes on their home

$5,500 cash charitable contributions to the First United Methodist Church (Stanley and Joanna have a statement from First United Methodist supporting this contribution)

$5,000 additional state income taxes paid to the state of Illinois for 2022 (in additionto the state taxes withheld on Joanna's W-2)

(10) Other Information

Stanley and Joanna made estimated Federal tax payments during 2022 of $15,000.

If Stanley and Joanna have a tax overpayment, they wish to receive a refund.

Stanley, Joanna, and all the individuals they support have minimum essential

coverage for the year.

Ignore the alternative minimum tax (AMT).