INSTRUCTIONS

$$ Based on the facts below, prepare for Shelli Thomson her US $($federal$)$ individual incometax return $($Form $1040),$ her Schedule A $($Itemized Deductions$),$ and Schedule $3($Additional Credits and Payments$).$

$$ On the Form $1040,$ multiply the total amount of income you entered on the Form $1040$ by$10\%($Shelli$$s income tax rate$)$ and enter that amount on the Form $1040.$

$$ The standard deduction is $$12,000$

FACTS

$1.$

d$.$ Tax return filing status is single; and

e$.$ Her ordinary income tax rate is $10\%$

$3.$ For the taxable year, Shelli:

a$.$ Earned $$50,000$ in wages as a chemist

b$.$ Her employer, Sargent Chemical Corp, did not withhold federal and state income

taxes;

c$.$ Received $$200$ of interest on her savings bank account;

d$.$ Paid $$7,000$ in out$-$of$-$pocket medical expenses including co$-$pays for prescription

drugs and doctor appointments;

e$.$ Paid property $($real estate$)$ taxes of $$5,000$ to the city of Los Angeles;

f$.$ Paid $$10,000$ in home mortgage interest on her home mortgage. Her mortgage was

$$100,000$ and was secured by her home;

g$.$ Incurred a $$2,000$ theft loss;

h$.$ Incurred a $$3,000$ casualty loss after her home was damaged by a tornado in a

federally declared disaster area;

i$.$ Donated $$200$ in cash to a tax$-$exempt charity; and

j$.$ Can claim a $$500$ American Opportunity Credit.