Beverly and Ken Hair have been married for 3 years. Beverly works as an accountant at Cypress Corporation. Ken is a full-time student at Southwest Missouri State University (SMSU) and also works part-time during the summer at Cypress Corp. Ken’s birthdate is January 12, 1992 and Beverly’s birthdate is November 4, 1994. Bev and Ken’s earnings and income tax withholdings are reported on the following Form W-2s: 

The Hairs have interest income of $1,000 on City of St. Louis bonds. Beverly and Ken also received the following Form 1099-INT and 1099-DIV: 

Ken is an excellent student at SMSU. He was given a $1,750 scholarship by the university to help pay educational expenses. The scholarship funds were used by Ken for tuition and books. Last year, Beverly was laid off from her former job and was unemployed during January 2018. She was paid $1,825 of unemployment compensation until she started work with her current employer, Cypress Corporation. Ken has a 4-year-old son, Robert R. Hair, from a prior marriage that ended in divorce in 2013. During 2018, he paid his ex-wife $300 per month in child support. Robert is claimed as a dependent by Ken’s ex-wife. 

During 2018, Ken’s aunt died. The aunt, in her will, left Ken $15,000 in cash. Ken deposited this money in the Boatman’s Bank savings account. 

Required: 

Complete the Hair’s federal tax return for 2018 on Form 1040, Schedule 1, and the Qualified Dividends and Capital Gain Tax Worksheet.

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a Employee's social security number 465-74-3321 Safe, accurate, FAST! Use Visit the IRS website at IRSe file www.irs.goviefle OMB No. 1545-0008 b Employer identification number (EIN) 31-1238967 2 Federal income tax withheld 1 Wages, tips, other compensation 50,700.00 3 Social security wages 50,700.00 5 Medicare wages and tips 4,892.00 4 Social security tax withheld c Employer's name, address, and ZIP code 3,143.40 6 Medicare tax withheld Cypress Corp. 1234 E. Chestnut Parkway Springfield, MO 65802 50,700.00 7 Social security tips 735.15 8 Allocated tips d Control number 9 Verification code 10 Dependent care benefits Suff. 11 Nonqualified plans e Employee's first name and initial Last name 12a See instructions for box 12 Beverly Hair 3567 River Street 13 Thrd-party sick pay Mutory employee tinament 12b plan 14 Other 12c Springfield, MO 63126 12d 1 Employee's address and ZIP code Employer's state ID number MO| 15 State 16 State wages, tips, etc. 17 State income tax 18 Local wages, tips, etc. 19 Local income tax 20 Locality name 50,700.00 680.00 2018 Department of the Treasury-Internal Revenue Service ,W-2 Wage and Tax Statement Form Copy B-To Be Filed With Employee's FEDERAL Tax Return. This information is being fumished to the Internal Revenue Service. a Employee's social security number 465-57-9934 Safe, accurate, FAST! Use Visit the IRS website at RSe file www.rs.govlefile OMB No. 1545-0008 b Employer identification number (EIN) 31-1238967 c Employer's name, address, and ZIP code 1 Wages, tips, other compensation 2,700.00 3 Social security wages 2 Federal income tax withheld 0.00 4 Social security tax withheld 167.40 2,700.00 5 Medicare wages and tips Cypress Corp. 1234 E. Chestnut Parkway Springfield, MO 65802 6 Medicare tax withheld 2,700.00 7 Social security tips 39.15 8 Allocated tips d Control number 9 Verification code 10 Dependent care benefits e Employee's first name and initial Last name Suff. 11 Nonqualified plans 12a See instructions for box 12 Ken Hair 13 Stauiory employee Retirement plan Third-party sick piay 12b 3567 River Street 14 Other 12c Springfield, MO 63126 12d t Employee's address and ZIP code 15 Slate Employer's state ID number 16 State wages, tips, etc. 17 State income tax 18 Local wages, tips, etc. 19 Local income tax 20 Locality name 2,700.00 0.00 Wage and Tax Statement 2018 Department of the Treasury-Internal Revenue Service W-2 Form Copy B-To Be Filed With Employee's FEDERAL Tax Return. This information is being fumished to the Internal Revenue Service.