Your clients, Jim and Pam Halpert, both age 42, are married and live in Scranton, Pennsylvania. You are the tax accountant for the Halpert's, and they have requested that you complete their 2021 federal income tax return, including Form 1040, Schedule 1, Schedule 2, Schedule A, Schedule C, Schedule D, Schedule SE, Form 4562, and Form 8960.

The Halpert's have one child, Cecelia Halpert, age 11. In 2021, Jim was laid off from his job at Dunder Mifflin, so he started a sole proprietorship named Athlead, a sports marketing company. Pam was employed by Dunder Mifflin the entire year. Following is the information the Halpert's provided pertaining to their 2021 tax situation.

Employer’s Name	Employee’s Name	Box 1 & 3: Wages	Box 2: Federal Income Tax Withheld	Box 17: State Income Tax Withheld
Dunder Mifflin	Jim Halpert	$50,000	$6,000	$2,400
Dunder Mifflin	Pam Halpert	$60,000	$7,800	$3,300

Jim's business information

Jim’s business information
Revenue	$450,000
Expenses:
Rent Expense	100,000
Employee Wages	120,000
Meals with clients at restaurants	26,000
Travel expenses for meetings with clients	20,000
Entertainment expenses	8,000
Administrative expenses	12,000
Property taxes and business licenses	9,000
Liability insurance	2,000
Other information:
Purchase of computer equipment on 6/16/2021	$50,000
Purchase of 2021 SUV (less than 6,000 lbs.) on 9/19/2021, used 80% for business	70,000
The business does not qualify for the qualified business income deduction.
Other income information
Interest from ABC Bank	$2,000
Interest income from the County of Lackawanna, PA bond	500
Unemployment compensation after Jim was laid off	4,000
Inheritance from deceased grandparent	100,000
Lottery winnings	50,000
Sale of stock during the year:
200 shares of GameStop Corp. stock were purchased on 10/15/2021 for $4,000 and sold on 11/30/2021 for $24,800
300 shares of Xerox Corp. stock were purchased on 8/1/2016 for $6,600 and sold on 10/1/2021 for $3,200.
Other Expense Information
Charitable contributions to a qualified charity	10,000
Interest paid on credit card	1,500
Mortgage interest on a principal residence	12,000
County personal property taxes	1,200
State real estate taxes	6,000
Federal estimated tax payments	48,000

 

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Before preparing the forms/schedules, please note the following: 1. 2021 tax returns will be prepared using 2020 forms/schedules in this course. Due to the timing of this course, the 2021 forms/schedules were not available yet. As a result, certain numbers stated on the forms/schedules that are adjusted for inflation annually will NOT be the correct numbers for 2021. For example, the standard deduction amounts are slightly higher in 2021 than 2020. Please reference your etextbook for the correct 2021 numbers. 2. Complete only the requested forms/schedules: Form 1040, Schedule 1, Schedule 2, Schedule A, Schedule C, Schedule D, Schedule SE, Form 4562, and Form 8960. If a line of a form or schedule requests a different form/schedule that is not explicitly required for this OP, you do NOT need to complete it. 3. As always, some lines will not need to be populated on the forms/schedules if the taxpayer did not have any activity related to the line. 4. You are highly encouraged to reference the instructions for the forms that may be found on IRS.gov. However, once again, due to the fact that the 2021 forms/schedules are unavailable, be aware that some of the numbers/rules in the 2020 instructions may not be accurately reflected for 2021. Therefore, when in doubt, use the information in your etextbook as a cross-reference. Specific directions for completing Comprehensive Tax Return 1: • Download the following tax forms: "Form 1040" "Schedule 1, Form 1040" "Schedule 2. Form 1040" "Schedule A, Form 1040" "Schedule C, Form 1040", "Schedule D. Form 1040", "Schedule SE, Form 1040" "Form 4562", and "Form 8960 Using the taxpayer information provided, complete the Halpert's 2021 Form 1040 with all applicable supporting forms/schedules. • Refer to the more specific instructions provided for the forms with Overview Problems 4, 5, and 6 if you need additional assistance. • Save your completed tax forms and schedules, and then submit them on Canvas. • Optional: If you would like to submit additional documentation showing work you did related to a calculation you did outside of the return (such as the depreciation calculation), you may do so. Providing support for your work is helpful to your instructor in awarding partial credit. Before preparing the forms/schedules, please note the following: 1. 2021 tax returns will be prepared using 2020 forms/schedules in this course. Due to the timing of this course, the 2021 forms/schedules were not available yet. As a result, certain numbers stated on the forms/schedules that are adjusted for inflation annually will NOT be the correct numbers for 2021. For example, the standard deduction amounts are slightly higher in 2021 than 2020. Please reference your etextbook for the correct 2021 numbers. 2. Complete only the requested forms/schedules: Form 1040, Schedule 1, Schedule 2, Schedule A, Schedule C, Schedule D, Schedule SE, Form 4562, and Form 8960. If a line of a form or schedule requests a different form/schedule that is not explicitly required for this OP, you do NOT need to complete it. 3. As always, some lines will not need to be populated on the forms/schedules if the taxpayer did not have any activity related to the line. 4. You are highly encouraged to reference the instructions for the forms that may be found on IRS.gov. However, once again, due to the fact that the 2021 forms/schedules are unavailable, be aware that some of the numbers/rules in the 2020 instructions may not be accurately reflected for 2021. Therefore, when in doubt, use the information in your etextbook as a cross-reference. Specific directions for completing Comprehensive Tax Return 1: • Download the following tax forms: "Form 1040" "Schedule 1, Form 1040" "Schedule 2. Form 1040" "Schedule A, Form 1040" "Schedule C, Form 1040", "Schedule D. Form 1040", "Schedule SE, Form 1040" "Form 4562", and "Form 8960 Using the taxpayer information provided, complete the Halpert's 2021 Form 1040 with all applicable supporting forms/schedules. • Refer to the more specific instructions provided for the forms with Overview Problems 4, 5, and 6 if you need additional assistance. • Save your completed tax forms and schedules, and then submit them on Canvas. • Optional: If you would like to submit additional documentation showing work you did related to a calculation you did outside of the return (such as the depreciation calculation), you may do so. Providing support for your work is helpful to your instructor in awarding partial credit.

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Form 1040 Jim and Pam Halpert Filing Status Married Filing Jointly Total Income 450000 Adjusted Gros... View the full answer