1. David and Darlene Jasper have one child, Sam, who is 6 years old (birthdate July 1, 2012). 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, 1985 and Darlene’s birthday is January 31, 1987.

David and Darlene’s earnings and withholdings for 2018 are:
David: Earnings from Apple Company (office manager) .................. $26,500
Federal income tax withheld ............................................................................ 2,800
State income tax withheld ................................................................................. 1,050
Darlene: Earnings from Rose Company (perfume tester) ................ $25,200
Federal income tax withheld ........................................................................... 2,650
State income tax withheld ................................................................................ 1,000

Their other income includes interest from Pine Tree Savings and Loan of $1,900. Other information and expenditures for 2018 are as follows:

Interest: On home acquisition mortgage ................................ $11,200
Credit card ................................................................................................... 925
Taxes: Property taxes on personal residence ............................. 1,300
State income taxes paid in 2018 (for 2017) ................................... 315
Contribution (with written acknowledgement) to church....... 1,020
Medical insurance ................................................................................... 675
Medical and dental expenses ........................................................... 5,785
Income tax return preparation fee paid in 2018 ......................... 200
Actual general state sales tax for 2018 ....................................... 1,016
Payment of union dues ......................................................................... 225

David and Darlene received the following letter from Sam’s daycare provider:

In 2018, David lost his job. David paid for one month of insurance out-of-pocket and then the family went without insurance for September through December 2018. They are not eligible for any exemptions from health care coverage.

Required:

Complete the Jaspers’ federal tax return for 2018. Use Form 1040, Schedule 3, Schedule 4, Schedule A, Schedule B, Form 2441, the Shared Responsibility Payment Worksheet, and the Flat Dollar Amount Worksheet (as needed). Make realistic assumptions about any missing data.

2A. Steve Jackson (birthdate December 13, 1965) is a single taxpayer living at 3215 Pacific Dr., Apt. B, Pacific Beach, CA 92109. His Social Security number is 465-88-9415. In 2018, Steve’s earnings and income tax withholding as laundry attendant of a local hotel are:

Earnings from the Ocean View Hotel ............................. $21,500
Federal income tax withheld ..................................................... 215
State income tax withheld ........................................................ 100

Steve has a daughter, Janet, from a previous marriage. Janet is 11 years old (Social Security number 654-12-6543). Steve provides all Janet’s support. Also living with Steve is his younger brother, Michael (Social Security number 667-21-8998). Michael, age 47, is unable to care for himself due to a disability. On a reasonably regular basis, Steve has a care giver come to the house to help with Michael. He uses a company called HomeAid, 456 La Jolla Dr., San Diego, CA 92182 (EIN 17-9876543). Steve made payments of $990 to HomeAid in 2018. Janet receives free after-school care provided by the local school district.

Required:

Complete Steve’s federal tax return for 2018. Use Form 1040, Schedule 3, Form 2441, Child Tax Credit Worksheet, Form 8812, EITC Worksheet A, and Schedule EIC.

2B. David Fleming is a single taxpayer living at 169 Trendie Street, Apartment 6B, La Jolla, CA 92037. His Social Security number is 865-68-9635 and his birthdate is September 18, 1973.

David was employed as a delivery person for a local pizza restaurant. David’s W-2 showed the following:

David’s only other source of income during the year was a prize he won appearing on a game show. The game show sent David home with a Form 1099-MISC:

He has no other adjustments to income or deductible expenses. Unfortunately,  David’s employer did not provide health care to its employees but David signed up  for coverage through his state’s health care exchange. The exchange sent him a Form  1095-A as shown on Page 7-63.

Required:

Complete David’s federal tax return for 2018. Use Form 1040, Schedule 1,  Schedule 2, and Form 8962. Make realistic assumptions about any missing data.

Transcribed Image Text:

KIDDIECARE INC. 10250 Santa Monica Blvd. Los Angeles, CA 90067 EIN: 13-3345678 January 14, 2019 David and Darlene Jasper 4639 Honeysuckle Lane Los Angeles, CA 90248 Dear David and Darlene, Thank you for your patronage of our day care center with your child, Sam Jasper, in 2018. This statement serves as a record of the cost of daycare services we provided during calendar year 2018: Dates of Service 1/1/2018 – 08/25/2018 Child Amount Sam Jasper $3,500.00 Sincerely, /s/ Marcia Clarke Marcia Clarke Director, KiddieCare Inc.