Assignment 1: 1040 Tax Return

Facts:

Sally Student

123 Maple Street

Cincinnati, Ohio 44000 Social Security No. 123-45-6789

Sally is a 30-year old single person. She is an accountant and also works a side weekend job in an art gallery. She is not claimed as a dependent by anyone else. For 20XX, she had the following

INCOME:

1. W-2 from 1^st employer

Gross wages income: $13,164

Federal Withholding $ 921

2. W-2 from 2d employer

Gross wages $50,000.00

Federal withholding $ 9,500.00

3. Interest income from bank $132.00

4 Interest from brokerage firm $2,100.00

5. Ordinary "qualified" dividends from large U.S. Corporation: $3,000.00

POSSIBLE DEDUCTIONS

1. Mortgage interest paid $6,700

2. State and local income taxes paid $1,400

3. Charitable contributions to a 501( c)(3) charity $1,800.00

4. Casualty loss, her garage was destroyed by fire. Cost and fair market value were $9,000.

Insurance only paid $3,000

5. Property taxes on her home: $2,600

Go the IRS website at irs.gov, and get a Form 1040 and instructions, and also a Schedule A and B. Use these, with the facts above, to prepare a Form 1040 for Sally for the most recent year for which there is a form (this is almost always the year prior to the present year). Remember to consider both the standard deduction vs. itemized deduction, and the personal exemption, if any. Also, you may need other forms, such as the 4684 and instructions.