Mary and Calvin Williams are married taxpayers who file a joint return. Mary was born in 1974 and Calvin was born in 1972. They reside at 19572 Atlantic Drive, Ocean City MD 20789. The relevant information from their Form W2s is:

Description Mary Calvin

Wages, tips, other compensation $35,500 $65,000

Federal income tax withheld 6,490 7,020

State income tax withheld 4,100 5,775

The Williams has 3 children: Felicia born in 2001, Misha born in 2003, and Lee born in 2014. Felicia attends Howard University Law School. Her tuition and books were $44,000 for 2021; her room and board were an additional $10,000. Misha attends Prince Georges Community College. Her tuition and books were $6,500. She lives at home with her parents. Lee attends Mount Olive Preparatory School; his tuition is $20,000/year. Lee attends daycare after school - total cost for the year $15,000. Calvin’s father, Noah has lived with the Williams since 2015.

The Williams incurred the following expenses on their home:

• Property taxes $ 7,875
• Home mortgage interest $15,200
• Repairs to roof $4,780
• Utilities $3,810
• Fire and theft insurance $2,290

The following medical expenses were incurred in 2021:

• Medical insurance premiums are $ 4,380
• Cosmetic surgery for Mary to remove a tattoo $7,760
• Knee replacement surgery for Noah $7,310
• Prescription medicines for Misha $ 860
• Hospital expenses for Felicia were $ 2,850
• Reimbursement from Calvin’s insurance company, $5,500

Other relevant information that occurred in 2021 are:

• Mary paid $8,000 in interest on her student loan.
• The Williams contributed $4,800 to their local church and gave used clothing (cost of $4,250 and fair market value of $480) to Goodwill. All donations are supported by receipts and are in very good condition.
• The Williams received interest income of $ 785 from Wells Fargo Bank
• The Williams received $2,400 qualified dividends from Midas Investments and $3,500 ordinary dividends from Lagos Corp.
• Calvin finally won the $2,000 daily jackpot at the Ocean City casino after he lost $2,700 in the slot machines.
• Mary loaned her best friend, Nadia, $7,500 in February 2012. Nadia declared bankruptcy in November 2021.

Prepare 2021, Form 1040, and Schedule. A and 1 for the Williams. Show all calculations on your worksheet below. For example, show how you calculated tax credits and the eligible medical expenses on the Sch. A and the tax on line 16 of the Form 1040

Answer rating: 100% (QA)

Description Mary Calvin Wages tips other compensation 35500 65000 Federal income tax withheld 6490 7020 State income tax withheld 4100 5775 The Williams has 3 children Felicia born in 2001 Misha born ... View the full answer