Allie and Bert Cross, ages 40 and 43 are married and intend to file a joint income tax return. They live at 321 East Field Street, Cedar City, UT 84720. Allie’s social security number is 987-65-4321 and Bert’s social security number is 123-45-6789. Neither wants to contribute to the presidential election campaign. The following are their tax related activities for the current tax year. The family has full-year health care coverage through Allie’s employment.

Allie works for a regional CPA firm. Her W-2 shows wages of $130,000, $21,000 withheld for Federal income taxes and $5,000 withheld for state income taxes. Additionally, her firm provides her with group term life insurance equal to twice her salary.

Bert works as a high school math teacher at Cedar High School. His W-2 shows wages of $43,000, $9,000 withheld for Federal income taxes and $3,000 withheld for state income taxes.

They own a $100,000 Iron County Water District bond which paid them $3,000 of interest. Also, they own $200,000 in Certificates of Deposit held at Wells Fargo Bank which paid them interest of $5,000.

Dividends received on their ExxonMobil stock was $4,000. They have continuously owned this stock for 10 years.

They sold all 1,000 shares of their Apollo stock on May 1^st for $11,000. They paid $16,000 for the stock on March 1, 2016. They received form 1099-B wherein basis was reported to the IRS and for which they have no adjustments.

Bert appeared on The Price is Right television game show and won a trip to Aruba valued at $10,000 and a vacuum cleaner valued at $300.

Allie inherited $60,000 from her grandmother who passed away and Bert received $100,000 in life insurance proceeds from the passing of his father.

They incurred $5,500 in mortgage interest expense on their home loan. They paid $3,150 in real estate taxes on their home.

They donated $15,000 cash to their church, a qualified 501(c)(3) charity.

Sales tax on annual purchases amounted to $1,800.

Bert was struck by a car while crossing the street on his bicycle. The driver of the car was found negligent. No harm was done to the car but Bert’s bike was totaled. He paid $600 for it new and insurance of the car driver paid him $500 to compensate him for the loss.

Additionally, Bert’s medical expenses are estimated to be $250,000 as a result of his injuries from the accident. Insurance proceeds of $270,000 were awarded to Bert as compensatory damages as a result of his injuries. Bert did not miss any work since the accident occurred in the summer when school was out.

They received a $1,500 refund of state income taxes paid last year. Last year they itemized their deductions which amounted to $30,000 of deductions on Schedule A.

If they receive a tax refund, they would like it paid to their checking account # 555444333. The routing number for the account is 98989898.   They do not want to allow any other person to discuss their return with the IRS.

REQUIREMENTS

Step 1. Prepare Tax Formula Spreadsheet:

Please prepare a spreadsheet using the tax formula consistent with the following format:

Gross income (List gross income items not broad income, but actual taxable items).

Less Deductions for AGI (list each deductible item)

Equals AGI

Less Deductions from AGI (Standard or Itemized [list each item)

Equals Taxable Income

Tax (calculate the tax using 2019 tax rate schedule found on the inside cover of the text or at IRS.gov)

Less Tax withheld

Equals Amount Owed or Amount Overpaid

Step 2. Prepare tax return:

Complete the individual income tax return using 2019 forms. You will need the following forms:

1040 Individual Income Tax Return

Schedule 1

Schedule A

Schedule B

Schedule D

Qualified Dividends and Capital Gain Tax Worksheet

Answer rating: 100% (QA)

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