In June 2018 Phillip and Barbara Jones and their two dependent children, who are both over 17,
Question:
In June 2018 Phillip and Barbara Jones and their two dependent children, who are both over 17, moved from Chicago to Albuquerque, New Mexico, a distance of 1,327 miles, which they drove in their own car. The children’s names are Roger and Gwen and both will be attending the University of New Mexico in the fall, Roger as a freshman and Gwen as a junior. The move was a result of a civilian job transfer for Phillip. The distance from their old home to Phillip’s old office was 30 miles. Barbara quit her job in Chicago and decided to perform volunteer work for a year before seeking further employment. Phillip and Barbara incurred expenses of $4,550 to the moving company (which included $320 for temporary furniture storage), hotel charges of $550, and meals of $712 en route from Chicago to Albuquerque. Their new home is located at 7432 Desert Springs Way, Albuquerque, NM 87101. Phillip, but not Barbara, was employed in the new location throughout the year. Phillip’s social security number is 412-34-5670 (date of birth 6/12/1976), Barbara’s is 412-34-5671 (date of birth 8/12/1978), Roger’s is 412-34-5672 (date of birth 2/17/2001), and Gwen’s is 412-34-5673 (date of birth 9/14/1999). The Joneses had qualifying health care coverage at all times during the tax year.
Phillip is a civil engineer for a national firm; his W-2 contained the following information:
| Wages (box 1) | = | $ | 110,220.45 |
| Federal W/H (box 2) | = | $ | 11,015.42 |
| Social security wages (box 3) | = | $ | 110,220.45 |
| Social security W/H (box 4) | = | $ | 6,833.67 |
| Medicare wages (box 5) | = | $ | 110,220.45 |
| Medicare W/H (box 6) | = | $ | 1,598.20 |
In addition, both he and Barbara received Forms 1098-E from the federal student loan program. Phillip had student loan interest of $1,050, and Barbara had student loan interest of $750.
Prepare a Form 1040, and a Student Loan Interest Deduction Worksheet for Phillip and Barbara. (List the names of the taxpayers in the order in which they appear in the problem. Do not round intermediate computations. Round your final answers to the nearest whole dollar amount. Input all the values as positive numbers. Instructions can be found on certain cells within the forms.)
Expert Answer:
According to Income tax Act 1961 Generally Every Assessee whose income exceeds 250000 is require to pay tax But as per Act they had given special bene... View the full answer
