1. For each potential itemized deduction below, please indicate whether it can be deducted or not and why.

2. Once you have determined which itemized deductions are deductible, then complete the 2019 Schedule A. Assume the same information as on Assignment #1 and that Adjusted Gross Income on line 8b is $135,215.

3. Finish completing the Form 1040 pages 1&2. Starting after Line 8b. Based on the grants only qualifying for the child tax credits for each child and federal withholdings of $13,450. Assume that any overpayment will be refunded.

4. You can find the fillable or printable 2019 Form 1040, 2019 Schedule 1, and Schedule A on the IRS website at www.irs.gov. You may complete these forms by hand if you choose and scan a copy for me. (make sure they are legible to get full credit- if I can’t read it I can’t grade it) I prefer that your final submission is on the fillable forms downloaded as a pdf and submitted on Brightspace.

Bob (age 43) and Melissa (age 43) Grant are married and live in Lexington, Kentucky. The Grants have two children: Jared, age 15, and Alese, age 12. The Grants would like to file a joint tax return for the year.

The following information relates to the Grants’ tax year:

• Bob’s Social Security number is 987-45-1235

• Melissa’s Social Security number is 494-37-4893

• Jared’s Social Security number is 412-32-5690

• Alese’s Social Security number is 412-32-6940

• The Grants’ mailing address is 95 Hickory Road, Lexington, Kentucky 40502.

• Jared and Alese are tax dependents for federal tax purposes

• The Grants both want to contribute to the Presidential Election Campaign Fund.

Assume we are starting with Adjusted Gross Income on line 8b of $135,215.

The following items relate to the Grant’s 2019 Potential Itemized Deductions:

The Grants paid or incurred the following expenses during the year:

Dentist/Orthodontist (unreimbursed by insurance) $ 10,500

Quarterly Botox Injections at the Doctors for Bob to keep his face perky $4,500

Doctor fees (unreimbursed by insurance) $ 2,625

Prescriptions (unreimbursed by insurance) $ 1,380

KY state tax payment made on 4/15/19 for 2018 tax return liability $ 1,350

KY state income taxes withheld during 2019 $ 5,975

Real property taxes on residence $ 3,800

Vehicle registration fee based upon the value of vehicle $ 1,250

Mortgage interest on principal residence(acquisition indebtedness) $ 18,560

Mortgage interest on home equity LOC (principal $45,000 used to purchase a new car) $3,750

Contribution to the Red Cross $ 1,000

Contribution to Senator Rick Hartley’s Re-election Campaign $ 2,500

Contribution to First Baptist Church of Kentucky $ 6,000

The fee paid to Jones & Company, CPAs for tax preparation is $ 650

Gambling Losses $3,300

In addition, Bob drove 6,750 miles commuting to work and Melissa drove 8,230 miles commuting to work. The Grants have represented to you that they maintained careful logs to support their respective mileage.

The Grants drove 465 miles in total to receive medical treatment at a hospital in April.