Communications

Decision Making

Tax Forms Problem

Daniel $B.$ Butler and his spouse Freida $C.$ Butler file a joint return. The Butlers live $at625$ Oak Street $in$ Corbin, $KY40701.$ Dan$s$ Social Security number $is111-11-1112,$ and Freida$sis123-45-6780.$ Dan was born $on$ January $15,1972,$ and Freida was born $on$ August $20,1972.$

During $2023,$ Dan and Freida furnished over half $of$ the total support $of$ each $of$ the following individuals, all $of$ whom still live $at$ home:

Gina, their daughter, age $22,$ a full$-$time student, who married $on$ December $21,$ has $no$ income $of$ her own and did not file a joint return with her husband, Casey, who earned $$10,600$ during $2023.$ Gina$s$ Social Security number $is123-45-6788.$

Willie, their son, age $19,$ graduated high school $in$ May $2023.Heis$ taking a leap year and will not begin college until $2024.He$ had gross income $of$ $$6,300in2023.$ Willie$s$ Social Security number $is123-45-6787.$

Ben, their oldest son, age $26,is$ a full$-$time graduate student with gross income $of$ $$5,200.$ Ben$s$ Social Security number $is123-45-6786.$

Dan was employed $as$ a manager $byWJJJ,$ Inc. $(employer$ identification number $11-1111111,604$ Franklin Street, Corbin, $KY40702),$ and Freida was employed $as$ a salesperson for Corbin Realty, Inc. $(employer$ identification number $98-7654321,899$ Central Street, Corbin, $KY40701).$ Selected information from the $W-2$ forms provided $by$ the employers $is$ presented below. Dan and Freida use the cash method.

Line Description Dan$$ Freida

$1$ Wages, tips, other compensation $$74,000$ $$86,000$

$2$ Federal income tax withheld $11,00012,400$

$17$ State income tax withheld $2,9603,440$

Freida sold a house $on$ December $30,2023,$ and will $be$ paid a commission $of$ $$3,100(not$ included $in$ the $$86,000$ reported $on$ the $W-2)on$ the January $10,2024,$ closing date.

Other income $(as$ reported $on1099$ forms$)$ for $2023$ consisted $of$ the following:

Dividends $onCSX$ stock $(qualified)$ $$4,200$

Interest $on$ savings $at$ Second $Ba$