4:09 4 Tax Return Problem 1-Spring 20... a. Diana received $2,000 in alimony and $4,500 in child support payments from her former husband. They divorced on 5/30/2016. b. Diana won a $900 cash prize at her church- sponsored Bingo game. e. The couple bought 50 shares of ABC Inc. stock for $40 per share on July 2. The stock was worth $47 a share on December 31. d. Diana's father passed away on April 14. She inherited cash of $50,000 from her father and his baseball card collection, valued at $2,000. As beneciary of her father's life insurance policy, Diana also received $150,000. e. The couple spent a weekend in Atlantic City in November and came home with gross gambling winnings of $1,200. f. Ryan was hit and injured by a drunk driver while crossing a street at a crosswalk. He was unable to work for a month. He received $6,000 from his disability insurance. Ryan had paid for the insurance policy. g. The drunk driver who hit Ryan in part (h) was required to pay his $2,000 medical costs, $1,500 for the emotional trauma he suffered from the accident, and $5,000 for punitive damages. h. Diana is a 10 percent owner of MNO Inc., a Subchapter S corporation. The company reported ordinary business income for the year of $92,000. Diana acquired the MNO stock two years ago. (Diana has not received her Schedule K-l yet, but she knows this information to be accurate.) i. Diana's daycare business collected $35,000 in revenues. In addition, customers owed her $3,000 at year-end. During the year, Diana spent $5,500 for supplies, $1,500 for utilities, $15,000 for rent, and $500 for miscellaneous expenses. One customer gave her use of his vacation home for a week (worth $2,500) in exchange for Diana allowing his child to attend the day care center free of charge. Diana accounts for her business activities using the cash method of accounting. Filing Status ] Single Married filling jointly Marrie Qualifying arriving Chack only spouse (OSS) one box. you checked the MFS box, enter the name of your spo the child's name If ma qualifying person is a child but not your dependent: Your first name and middle Initial Last name Your soold soourity number Diana Workman 1 1 12 3 3 3 3 If joint return, spouse's first name and middle Initial Last name Spouse's soold security number Ryan Workman 1 1 0 4 5 5 5 5 Home address (number and street). If you have a P.O. box, see instructions. Apt no. rather season campaig 1234 Numbers Lane Chack hare if you, or your City, town, or post office. If you have a foreign address, also complete spaces below. State ZIP code spouse If filing jointly. want $3 11225 to go to this fund. Checking a Atlantic City NJ box below will not change Foreign country name Foreign province/state/county Foreign postal code your tax or refund. Digital At any time during 2022, did you: (a) receive (as a reward, award, or payment for property or services); or (b) sell. Assets exchange, gift, or otherwise die ose of a digital asset (or a financial interest in a digital asset)? (See instructions.) No Standard Someone can claim: You as a dependent Your spouse as a depender Deduction ) Spouse itemizes on a separate return or you were a dual-status alien Age/Blindness You: Were born before January 2, 1958 Are blind Spouses ary 2. 1958 is blind Dependents (see instructions): (2) Social se the box if qualifies for (see instructions): if more (1) First name Last name Credit for other d than four Jorge Anderson 1 12 2 3 3 4 5 6 Son dependents, see instructions and check here . Income 1a Total amount from Form(s) W-2, box 1 (see instructions) Household employee wages not reported on Form(s) W-2 . Attach Form(s) Tip income not reported on line 1a (see instructions) W-2 here. Also attach Forms d Medicaid waiver payments not reported on Form(s) W-2 (see instruction: W-2G and Taxable dependent care benefits from Form 2441, line 26 1099-R If tax was withheld. Employer-provided adoption benefits from Form 8839, line 29 If you did not g Wages from Form 8919, line 6 . get a Form h Other earned income (see instructions) . W-2. 509 Nontaxable combat pay election (see instructions) Instructions. Add lines 1a through 1h Attach Sch. B 2a Tax-exempt interest . 2a 250 b Taxable interest 3a Qualified dividends 3a b Ordinary dividends 4a IRA distributions 4a b Taxable amount. Standard 5a Pensions and annuities 5a b Taxable amount . Deduction for 6a Social security benefits 6a b Taxable amount . " Single or Married filing If you elect to use the lump-sum election method, check here (see instructions) separately. 512.950 Capital gain or (loss). Attach Schedule D if required. If not required, check here - Mamad thing Other income from Schedule 1, line 10 9 Add lines 1z, 2b. 3b, 4b. 5b, 6b. 7, and 8. This is your total income surviving spouse 10 825.900 10 Adjustments to income from Schedule 1, line 26 - Hand of Subtract line 10 from line 9. This is your adjusted gross income 11 household. Standard deduction or itemized deductions (from Schedule A) 12 13 Qualified business income deduction fro m Form 8995 or Fo n 8995-4 13 14 Add lines 12 and 13 14 15 Subtract line 14 from line 11. it your taxable income 15 r Disclosure, Priva 1040 hp4:091 Tax Return Problem 1-Spring 20... ~ Done of charge. Diana accounts for her business activities using the cash method of accounting. L. Ryan received a W-2 from his employer. However, the W-2 he received listed ONLY his salary (and those disability premiums) in Box 1. He has already heard that DI will be issuing "corrected" W-2s shortly. Apparently, DI's accountant did not understand what types of fringe benefits or other perks may have been taxable. ADD any of the following items that are TAXABLE to the amount in Box 1 of Ryan's W- 2 to get the dollar amount that goes on line 1 of the Form 1040. If the amount(s) are NOT taxable or are not taxable in the current year, do not add them to Box 1. . Ryan's employer pays the couple's annual health insurance premiums of $5,500 for a qualified plan. . DI paid $8,000 toward Ryan's tuition and fees for his MBA. . Ryan received $400 cash for reaching 10 years of continuous service at DI. . For meeting his performance goals this year, Ryan was informed on December 27 that he would receive a $5,000 year-end bonus. DI (located in Houston, Texas) mailed Ryan's bonus check from its payroll processing center (Tampa, Florida) on December 28. Ryan didn't receive the check at his home until January 2. DI did not include this amount in the 2022 salary on his W-2. Information needed: . 1099s (3) . Form W-2 . Instruction sheet . Tax forms (Form 1040 Schedule 1 and Schedule C)4:091 Tax Return Problem 1-Spring 20... ~ Done 2 to get the dollar amount that goes on line I of the Form 1040. If the amount(s) are NOT taxable or are not taxable in the current year, do not add them to Box 1. . Ryan's employer pays the couple's annual health insurance premiums of $5,500 for a qualified plan. . DI paid $8,000 toward Ryan's tuition and fees for his MBA. . Ryan received $400 cash for reaching 10 years of continuous service at DI. . For meeting his performance goals this year, Ryan was informed on December 27 that he would receive a $5,000 year-end bonus. DI (located in Houston, Texas) mailed Ryan's bonus check from its payroll processing center (Tampa, Florida) on December 28. Ryan didn't receive the check at his home until January 2. DI did not include this amount in the 2022 salary on his W-2. Information needed: . 1099s (3) . Form W-2 . Instruction sheet . Tax forms (Form 1040, Schedule 1, and Schedule C) Required: Prepare a Schedule C, Schedule 1, and Form 1040 (through Line 9-Total Income). The forms should be filled out in pen or pencil (I suggest using something you can erase). Do not type amounts in to the "fill-in" forms provided on the irs.gov site. A paper copy of the tax return is required to be submitted either in class or to my office.u VOID CORRECTED PAYER'S name, street address, city or town, state or province, country, ZIP | Payer's RTN (optional) OMB No. 1545-0112 or foreign postal code, and telephone no. 2022 Interest Widgets, Inc. 9876 Corporate Drive 1 Interest income Income New York, NY 53097 $ 500.00 Form 1099-INT 2 Early withdrawal penalty Copy 1 PAYER'S TIN RECIPIENT'S TIN $ For State Tax 3 Interest on U.S. Savings Bonds and Treas. obligations Department 61-1234567 111-22-3333 RECIPIENT'S name 4 Federal income tax withheld 5 Investment expenses $ Ryan and Diana Workman 6 Foreign tax paid 7 Foreign country or U.S. possession Street address (including apt. no.) 9 Specified private activity bond 1234 Numbers Lane 8 Tax-exempt interest interest City or town, state or province, country, and ZIP or foreign postal code $ 10 Market discount 11 Bond premium Atlantic City, NJ 11225 .FATCA filing. $ requirement 12 Bond premium on Treasury obligations 13 Bond premium on tax-exempt bond 0 $ Account number (see instructions) 14 Tax-exempt and tax credit 15 State 16 State identification no. |17 State tax withheld bond CUSIP no. $ $ Form 1099-INT www.irs.gov/Form1099INT Department of the Treasury - Internal Revenue Service. . K n g a m n V C X N 2.2.2.2.2 a Employee's social security number 110- 44- 5555 OMB No. 1545-0008 b Employer identification number (EIN) 1 Wages, tips, other compensation 2 Federal income tax withheld 92, 850,00 1 1. 000. 00 ress, and ZIP code 3 Social security wages 4 Social security tax withheld DATAFILE INC 92. 850. 00 5756. 70 5 Medicare wages and tips 6 .Medicare tax withheld 92, 850.00 1346. 33 7 Social security tips 8 Allocated tips d Control number 9 10 Dependent care benefits e Employee's first name and initial Last name Suff. 11 Nonqualified plans 12a RYAN WORKMAN 13 Statutory Retirement Third-party player plan d 14 Other 12c 12d f Employee's address and ZIP code 15 State 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 92. 850. 00 4178.00 Department of the Treasury- Internal Revenue Service form W-2 Wage and Tax Statement 2022 Copy 1-For State, City, or Local Tax Departmentm V O VOID CORRECTED PAYER'S name, street address, city or town, state or province, country, ZIP | 1a Total ordinary dividends OMB No. 1545-0110 or foreign postal code, and telephone no. Form 1099-DIV ABC, Inc. $ 50.00 Dividends and 20 Block Avenue 1b Qualified dividends (Rev. January 2022) Distributions New York, NY 53097 For calendar year $ 50.00 20 2a Total capital gain distr 2b Unrecap. Sec. 1250 gain Copy 1 $ $ For State Tax PAYER'S TIN RECIPIENT'S TIN 2c Section 1202 gain 2d Collectibles (28%) gain Department $ 61-2002002 110-44-5555 2e Section 897 ordinary dividends 2f Section 897 capital gain $ EA RECIPIENT'S name Nondividend distributions 4 Federal income tax withheld $ $ Ryand and Diana Workman 5 Section 199A dividends Investment expenses Street address (including apt. no.) $ 7 Foreign tax paid 8 Foreign country or U.S. possession 1234 Numbers Lane City or town, state or province, country, and ZIP or foreign postal code $ 9 Cash liquidation distributions | 10 Noncash liquidation distributions Atlantic City, NJ 11225 $ EA 11 .FATCA filing 12 Exempt-interest dividends. 13 Specified private activity requirement bond interest dividends 0 $ $ Account number (see instructions) 14 State |15 State identification no. 16 State tax withheld $ $ Form 1099-DIV (Rev. 1-2022) www.irs.gov/Form1099DIV Department of the Treasury - Internal Revenue Servicealt VOID CORRECTED PAYER'S name, street address, city or town, state or province, country, ZIP | Payer's ATN (optional) OMB No. 1545-0112 or foreign postal code, and telephone no. 2022 Interest City of Asbury 1210 Main Street 1 Interest income Income Asbury, NC 23114 Form 1099-INT 2 Early withdrawal penalty Copy 1 PAYER'S TIN RECIPIENT'S TIN For State Tax 3 Interest on U.S. Savings Bonds and Treas. obligations Department 31-456789 111-22-3333 $ RECIPIENT'S name 4 Federal income tax withheld| 5 Investment expenses $ Diana Workman $ 6 Foreign tax paid 7 Foreign country or U.S. possession Street address (including apt. no.) $ 8 Tax-exempt interest 9 Specified private activity bond 1234 Numbers Lane interes City or town, state or province, country, and ZIP or foreign postal code $ 250.00. $ 10 Market discount 11 Bond premium Atlantic City, NJ 11225 FATCA filing|$ $ requirement 1 12 Bond premium on Treasury obligations | 13 Bond premium on tax-exempt bond 0 $ Account number (see instructions) 14 Tax-exempt and tax credit 15 State 16 State identification no. 17 State tax withheld bond CUSIP no. $ Form 1099-INT www.irs.gov/Form1099INT Department of the Treasury - Internal Revenue Service4:09 Tax Return Problem 1-Spring 20... ~ Done Tax Return Problem #1 (Adapted from Connect-Chapter 5 #77) Diana (age 38) and Ryan Workman (age 40) were married on January 1, 2021. Diana has an eight-year- old son, Jorge Anderson, from her previous marriage. Diana will claim Jorge as a dependent during the current year. Ryan works as a computer programmer at Datafile Inc. (DI) and is completing an MBA program. Diana is self-employed and runs a day care center that has been in business for the past 10 years. The Workmans personal information needed to complete the Form 1040 is below: Social Security Numbers: Ryan 110-44-5555 Diana 111-22-3333 Jorge 112-23-3456 Address: 1234 Numbers Lane Atlantic City, NJ 11225 The Workmans do not want to direct any money to the Presidential Election Campaign nor did they engage in any cryptocurrency transactions during the year. Neither Diana nor Ryan were born before 1957 and neither of them is legally blind. Day Care Center Information: Name: Tiny Tots Address: 2020 Kiddie Way, Atlantic City, NJ 11227 Employer ID number: 61-9988776 Business code: 624410 Accounting method: Cash Diana is not required to file any Form 1099s due to the childcare business. She did materially participate in the business. In addition to the tax information on their W-2 (see ";" for more information on Ryan's W-2) and 1099s provided in class, the Workmans disclose the following information in their interview with you: a. Diana received $2,000 in alimony and $4,500 in child support payments from her former husband