Billy J. (SSN 231-45-1246) and Frances K. (SSN 249-65-8952) Johnson (ages 42 and 39, respectively) reside at 225 Sunny Orchards Ave., Orlando, FL 85623, with their two children whom they fully support: Jill (age 10, SSN 754-33-6545) and Michael (age 6 SSN 810-55-8956).

The Johnson’s file a joint return, and neither elects to have money go to the presidential election campaign fund. Billy is employed as a computer technician and Frances is employed as a paralegal. Details of their salaries and withholdings are included on the W-2s. The family was covered by health insurance through Billy’s employer for the entire year.

For the 2017 tax year, on March 15, 2018, Billy contributes $5,500 to a traditional IRA for himself and $5,500 to a traditional IRA for his wife. Neither are covered by qualified retirement plans at work.

In addition, the Johnson’s earned interest income on a certificate of deposit and received dividends on stock they owned. See the included 1099s.

Billy pays his ex-wife alimony of $3,000 per month. His ex-wife’s Social Security number is 554-44-5555.

Billy went to a local casino and won $2,500. Billy had no other gambling income or loss for the year.

In March 2017, Frances received $35,000 in life insurance proceeds from the death of her mother. She chose to receive the payment as a lump sum.

Frances was laid off from her job in 2016. She received unemployment compensation of $800 in 2017 until she was hired as a paralegal in March 2017.

Cancelled checks, receipts, written acknowledgements, and paid bills support the following expenditures:

            Dr. J. Casey, MD                                                                     $ 982

            Dr. B. Williams, DDS                                                                 354

            Over the counter medications                                               265

            Medical insurance premiums                                                 589

            Prescription medications                                                        325

            Home mortgage interest                                                        7,852

            Property taxes paid on principal residence                         1,108

            Charitable contributions to First United Church (check)    1,850

            Rental for safe deposit box                                                         800

            Clothes to Salvation Army (5 bags in good condition)            150

            Income tax preparation fees                                                    1,200

            Credit card interest                                                                      75  

In August, someone broke into Billy’s house and stole a coin collection. The coin collection had a fair market value of $6,000 and a cost basis to Billy of $4,500. The coin collection was uninsured.

Since they both work outside the home, they are unable to be at home when their children return from school. The Johnsons pay Shelly White (SSN 564-25-4589), a friend of the family, $5,000 to care for Jill and Michael in her home after school hours and during the summer while the Johnsons work. Shelly’s address is 354 North Street, Orlando, FL 85623.

The Johnson’s signed their return on April 15, 2018.

The Johnson’s have requested to not have their refund direct deposited.

Prepare the Johnson’s 2017 tax return. Complete Form 1040, Schedule A, Schedule B, Form 4684, and Form 2441.

Answer rating: 100% (QA)

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