Larry K. and Cathy L. Zepp have been married 18 years. Larry is 52 years old...

  

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Larry K. and Cathy L. Zepp have been married 18 years. Larry is 52 years old (Social Security number 433-45-6789) while Cathy is 47 years old (Social Security number 433-45-6788). They live at 1234 Elm Dr. in Indianapolis, Indiana 46202. The couple uses the cash method of accounting and files their re- turn on a calendar-year basis. They are tired of politics and do not want to contrib- ute to the presidential election campaign. a. Larry is a salesman employed by DSK Industries. This year he earned $139,900. Federal and state income taxes withheld were $17,000 and $7,000 respectively. Social Security tax withheld was $8,240 and Medicare tax with- held was $2,029. b. Cathy recently completed a graduate degree in computer technology. She free- lances as an independent contractor in computer graphics. She uses her own name as the name of her business. Her earnings received from various engage- ments were $12,000. Her only expenses paid during the year were for miscel- laneous office supplies of $3,000. She paid estimated federal taxes during the year of $1,000 ($250 on each due date). Her business uses the cash method of accounting. C. Other income earned by the couple included interest income of $4,000 from a certificate of deposit issued by Highland National Bank and $975 of interest from tax-exempt bonds issued by the State of Indiana. d. The couple contributed $2,000 to a Health Savings Account that is ful- ly deductible. e. The couple has adequate health insurance coverage for the entire year. f. The couple owns a duplex that it rents out. It is located at 111 Nowhere Ave., Indianapolis, Indiana. Their rental records reveal the following information for the year. Rental income. $12,000 Rental expenses: Insurance 400 Mortgage interest.. 8,000 Repairs.... 1,000 Real property taxes on rental property 600 g. Other expenses paid during the year included: Unreimbursed medical expenses (doctors, dentists)... $9,000 Interest on home mortgage.. 12,000 Real property taxes on home... 4,000 State income taxes withheld (see above). 7,000 Charitable contributions..... 1,000 Rental of safety deposit box to hold gold coins held for investment 100 ****** Unreimbursed employee business expenses of Larry 3,000 PP. Complete Form 1040 and Schedules A, B, C, E, and SE. Assume that all of the expenses except their business expenses are incurred jointly. Ignore any estimated tax penalty. Larry K. and Cathy L. Zepp have been married 18 years. Larry is 52 years old (Social Security number 433-45-6789) while Cathy is 47 years old (Social Security number 433-45-6788). They live at 1234 Elm Dr. in Indianapolis, Indiana 46202. The couple uses the cash method of accounting and files their re- turn on a calendar-year basis. They are tired of politics and do not want to contrib- ute to the presidential election campaign. a. Larry is a salesman employed by DSK Industries. This year he earned $139,900. Federal and state income taxes withheld were $17,000 and $7,000 respectively. Social Security tax withheld was $8,240 and Medicare tax with- held was $2,029. b. Cathy recently completed a graduate degree in computer technology. She free- lances as an independent contractor in computer graphics. She uses her own name as the name of her business. Her earnings received from various engage- ments were $12,000. Her only expenses paid during the year were for miscel- laneous office supplies of $3,000. She paid estimated federal taxes during the year of $1,000 ($250 on each due date). Her business uses the cash method of accounting. C. Other income earned by the couple included interest income of $4,000 from a certificate of deposit issued by Highland National Bank and $975 of interest from tax-exempt bonds issued by the State of Indiana. d. The couple contributed $2,000 to a Health Savings Account that is ful- ly deductible. e. The couple has adequate health insurance coverage for the entire year. f. The couple owns a duplex that it rents out. It is located at 111 Nowhere Ave., Indianapolis, Indiana. Their rental records reveal the following information for the year. Rental income. $12,000 Rental expenses: Insurance 400 Mortgage interest.. 8,000 Repairs.... 1,000 Real property taxes on rental property 600 g. Other expenses paid during the year included: Unreimbursed medical expenses (doctors, dentists)... $9,000 Interest on home mortgage.. 12,000 Real property taxes on home... 4,000 State income taxes withheld (see above). 7,000 Charitable contributions..... 1,000 Rental of safety deposit box to hold gold coins held for investment 100 ****** Unreimbursed employee business expenses of Larry 3,000 PP. Complete Form 1040 and Schedules A, B, C, E, and SE. Assume that all of the expenses except their business expenses are incurred jointly. Ignore any estimated tax penalty.

Answer rating: 100% (QA)

1040 99 Department of the Treasury Internal Revenue Service US Individual Income Tax Return 2018 OMB ... View the full answer