ACCOUNTING 308 TAX RETURN PROJECT #1 Lance H. and Wanda B. Dean are married and live at 431 Yucca Drive, Santa Fe, NM 87501. Prepare the 2022 Federal income tax return for Lance and Wanda Dean. This is a group Lance works for the convention bureau of the local Chamber of Commerce, and Wanda owns her assignment. It is required that you submit both the (1) tax return and a (2) brief explanation for own business (an S-Corp). They file a joint return. line items on the return. Personal items: Please submit the following forms 4 items: Wages / Salaries $1 15,000 (Includes both Lance and Wanda) (1) Cover page with your name and section #, (2) 1040, (3) Schedule 1, and (4) a written Interest Income 1,100 explanation for each line item by form/schedule. Child support payments to John Allen 9,000 Alimony payments to John Allen 20,000 The written explanation should be focused on calculations and explanations. I don't need a list of Lottery winnings 870 every single line, just lines with calculations. Make sure the explanations match the numbers on Federal income tax withholding 12,000 the actual forms, if they do not, I will deduct points. Normally, this tax return would require State income tax withheld 5,000 additional forms including schedule D, E, and form 8995. I do not want these additional forms prepared; I only want the forms listed above. These additional forms would include the Wanda was previously married to John Allen, they divorced several years ago (prior to 2018). information that I expect to have in the explanations write-up (i.e. calculations, explanations, Under the divorce decree, Wanda was obligated to pay alimony and child support to John. She justifications, etc.). paid him $20,000 in alimony and $9,000 in child support, which agreed with the divorce decree. Hints: Wanda is the owner of her own business. Throughout the year she earned $36,000 of ordinary 1) Gambling winnings are reported on Schedule 1, line 8b income from this business (taxed as an S-Corp), reported on a K-1. 2) The income from Wanda's business will be reported on Schedule 1 line 5. 3) Capital gains/losses are reported on form 1040 line 7. Make sure to include a calculation. Additionally, Lance and Wanda had: 4) The taxpayer owes money (i.e., does not have a tax refund). There should be something (1) Sale of LMN publically traded stock on 2/15/2022 for $5,000 (originally purchased for on line 37 Form 1040. $10,000 on 8/15/2021) 5) Assume the taxpayers have adequate health insurance (i.e. ignore any health insurance (2) Sale of QRS publically traded stock on 10/15/2022 for $19,000 (originally purchased for items on the returns). $8,500 on 12/15/2020) 6) Do not forget the Qualified Business Income Deduction, line 13 form 1040. Assume (3) Sale of a boat on 5/15/2022 for $10,000 used for personal recreation (originally Wanda qualifies for this deduction. In Chapter 15, we can discuss the rules in more detail. purchased for $20,000 on 6/15/2017) Assume that the QBID is a deduction equal to 20% of Qualified Business Income (QBI). (4) Wanda inherited publically traded stock worth $30,000 from a deceased uncle on With QBI being equal to Schedule 1 line 5. September 30, 2022 7) Take the standard deduction (5) Immediately after receiving this stock, Wanda sold it for $30,000. This stock was 8) S corps are not subject to Self-Employment Tax. originally purchased by his uncle on January 15th, 2019, for $23,000 9) Don't forget to check the box for filing status (Single, MFJ, HOH, or MFS). 10) We are not preparing any state tax returns. 1 1) Make sure your written explanation includes a brief write-up on all of the "additional items." That is, make sure to explain items #1 through #5 12) Make sure to show the calculation (i.e., the formula) for important items. Such as the calculation of capital gains/losses and the calculation of tax