Basic Scenario $9$: Irene Sanders

Directions

Using the tax software, complete the tax return, including Form $1040$ and all appropriate forms, schedules, or

worksheets. Answer the questions following the scenario.

When entering Social Security numbers $($SSNs$)$ or Employer Identification Numbers $($EINs$),$ replace

the Xs as directed, or with any four digits of your choice.

Interview Notes

$$ Irene is $33$ years old and was married to Joel. Joel passed away on March $15,2022.$ Irene has not

remarried.

$$ Irene's $10-$year$-$old daughter, Penny, lived with her the entire year.

$$ Irene paid more than half the cost of keeping up a home and support for Penny.

$$ Irene took a distribution from her traditional IRA in June to pay for her family vacation.

$$ Irene was a full$-$time elementary school art teacher and earned $$47,500$ in wages. Irene purchased art

supplies for her class out of her own pocket totaling $$350.$

$$ Irene received a $1099-$E for student loan interest she paid in $2024.$

$$ Irene received a W$-2$G in the amount of $$3,600$ from the local casino.

$$ Irene paid child and dependent care expenses for Penny while she worked.

$$ Irene and Penny are U$.$S$.$ citizens and have valid Social Security numbers. They lived in the United States

for the entire year.

$$ If Irene is entitled to a refund, she would like to deposit half into her checking account and half into her

savings account. Documents from Adelphi Bank and Trust show that the routing number for both accounts

is $111000025.$ Irene$$s checking account number is $123456789$ and her savings account number is

$987654321.$ Basic Scenario $9$: Test Questions

$25.$ Irene is required to report her gambling winnings on her return.

a$.$ True

b$.$ False

$26.$ Irene$$s most advantageous filing status is:

a$.$ Head of Household

b$.$ Married Filing Jointly

c$.$ Married Filing Separately

d$.$ Qualifying Surviving Spouse $($QSS$)$

$27.$ Irene is not required to pay an additional $10\%$ tax on the early distribution from her IRA.

a$.$ True

b$.$ False

$28.$ Irene qualifies for which of the following credits?

a$.$ Child Tax Credit

b$.$ Child and Dependent Care Credit

c$.$ Both a and b

d$.$ Neither a nor b

$29.$ Irene should use Form $\_\_\_\_\_\_\_\_\_$ to split her refund between her savings and checking accounts.

$30.$ What amount can Irene claim as an adjustment to income for the supplies she purchased out of pocket?

a$.$ $$0$

b$.$ $$300$

c$.$ $$325$

d$.$ $$350$