Justin Bogan (Social Security number 112-11-2111) is 53 years old and is married to Jane Bogan (Social Security number 124-54-6789). She is 45 years old. The Bogan’ live at 1525 Fullerton Road La Habra, CA 90631. They file a joint return and have four dependent children, Justin, Jr, age 11, Corey age 16, Ronda, age 16 and Vanessa, age 12. Justin’s Social Security number is 123-45-6888, Corey’s Social Security Number is 252-65-9523, Ronda’s Social Security Number is 547-65-8585 and Vanessa’s Social Security number is 123-46-6787. In 2020, 

Justin and Jane had the following transactions: 

1. Justin received $255,000 included in his W-2 Box 1 from Alfie Corporation, where he is an accountant. Withholding for Federal income tax was $32,825. Assume the proper amount of Social Security and Medicare tax has been withheld including the .9% ACA Medicare tax (if any). 

2. Justin’s father passed-away in 2019 and in 2020 he received a parcel of Land worth $ 500,000. There was also a Life Insurance policy from AIG of $2,000.000 where Justin was the sole beneficiary. The proceeds were paid to him in an annuity of $425,000 per year for 5 years starting 2020. 

3. Justin and Jane received $19,200 interest on Irvine school district bonds. 

4. Justin received $12,000 of interest on Treasury bills. 

5. Justin received $5,500 interest from a CD at Wells Fargo. 

6. Justin received dividends of $20,000 noted in Box 1a of the 1099-DIV. Of which $12,000 were dividends from Vodaphone Group PLC stock (a UK listed Company) that he has owned for 180 days, and the remaining $8,000 dividends were from Tesla, Inc. Stock which he has owed for 25 days. 

7. Justin received 250 shares of Peach Corporation common stock as a stock dividend. The shares had a fair market value of $9,500 at the time he received them, and she did not have the option of receiving cash. 

8. Justin paid $15,500 alimony to his former wife, Nicole Bogan (Social Security number 124-48- 8786). The divorce was finalized in 2004. 

9. Justin and Jane kept the receipts for their 2020 sales taxes paid of $1,100. 

10. Justin and Jane’s itemized deductions for 2020 were as follows: 

 Real estate taxes on their principal residence were $8,500.  Mortgage interest on their principal residence was $17,500. 

 Cash contributions to the church totaled $8,500. 

 Non-cash contributions of $450 to Goodwill Industries. 

 Medical Expenses related to Doctors, etc. of $25,000 (Note the maximum amount was paid out of their Health Savings Account see below). 

 Job related unreimbursed expenses of $8,500 related to travel for his job. 

 Tax Preparation Fees of $5,000.  Contributions to the Mayor of Laguna Beach’s campaign of $2,800. 

 State income tax paid and withheld totaled $ 7,100 

11. Justin and Jane set up a new Health Savings Account for the maximum amount allowed in 2020. They have a high deductible medical plan at Alfie Corporation. 

12. Justin contributed $5,000 to each of the kids 529 plans in 2020. 

Compute the Bogan’s net federal tax payable (or refund due) 2020. Use the 1040 and applicable other forms that you need to file a return with the IRS for 2020.

Answer rating: 100% (QA)

Answer Taxable amount 1160700 Tax payable 11607009 104463 Deductions 1044637100... View the full answer