A409 - Tax Return #1 - Spring 2024 Instructions:

2023 return with the information below. 

 

I need help filling out Forms 1040, 8812, two 8814s (one for Ariana and one for Steven), and Schedules 1, 2, and SE using the information below. 

 

There are never pennies on a tax return; use normal rounding rules unless instructed otherwise in the form's instructions. A tax return never has negative numbers unless specifically stated on the form. Make sure all your forms are from the same year. Use the instructions for each form to understand how to enter the information. I do take off points for pennies and negative numbers.

 

Client Information:

Timothy and Lauren Morgan are married and file a joint tax return. Timothy's social security number is 661-23-4091, and he is 45 years old; Lauren's social security number is 661-23-4567, and she is 43 years old. They do not want $3 to go to the Presidential Election Campaign Fund. They had health insurance through Timothy's employer for the whole family for the entire year.

The Morgan family lives at 123 Perfect Lane, Happiness, AK, 99723.

The Morgan family supports Lauren's mother (age 74), who lives in a nursing home in Florida. Lauren's mom (Jocelyn Taylor, SSN 661-67-

6666) has no income.

Timothy works as an architect, and his reported W-2 wages are

$105,000. Lauren works as an accountant, and her reported W-2 wages

are $67,000.

Timothy and Lauren have two children: Steven (SSN 661-78-5555) is 15,

and Ariana (661-89-4444) is 13. Both children still live at home. Timothy and Lauren provide all of their support, and the children have no earned income.

Timothy, Lauren, and their two children each received the PFD, which was $1,312 per person. Ariana and Steven also each earned $1,500 interest in savings accounts set up by their grandparents when they were born. The Morgans would like to file two Form 8814s to report their children's taxes on their return.

The total amount of interest Timothy and Lauren earned during the year was $1,700.1

Lauren submitted a quilt to the county fair and won first place. She received a $475 cash prize.

The Morgan family has $38,000 of itemized deductions2.

Lauren owns and manages an apartment building as an investment. She

received the following amounts:3
o $16,000 rental income
o $6,100 of refundable security deposits
o $4,200 of nonrefundable pet deposits
o $5,300 of rent paid early for January of next year.

Every year, Timothy does several consulting assignments outside of his regular job. This year, he received $21,000 net of all related expenses.4

The Morgans had $29,500 withheld from their W-2 wages for federal income taxes during the year.

The Morgans have a QBI deduction on Form 1040, line 13, of $3,903 (see if you can calculate this yourself - you will have to do so on the next return!).5 6

If the Morgan family owes tax, assume they do not owe a penalty. If the Morgan family has overpaid, assume that they would like it to be refunded. Make up the bank information required.

They had no virtual currency transactions during the year.

 

 

1  This would normally be reported on Schedule B, but I am not requiring you to complete that form for this case.

2  This would normally be reported on Schedule A, but I am not requiring you to complete that form for this case.

3  This is net of all expenses. This would normally be reported on Schedule E, but I am not requiring you to

complete that form for this case.

4 There was no tax withheld - he received 1099-NECs from his clients. This amount is net of all expenses. This would normally be reported on Schedule C, but I am not requiring you to complete that form for this case.
5 This would normally be calculated and reported on Form 8995, but I am not requiring you to complete that form for this case.