Note: This problem is for the 2020 tax year.
Alfred E. Old and Beulah A. Crane, each age 42, married on September 7, 2018. Alfred and Beulah will file a joint return for 2020. Alfred's Social Security number is 111-11-1109. Beulah's Social Security number is 123-45-6780, and she has chosen to use "Old" as her married name. They live at 211 Brickstone Drive, Atlanta, GA 30304.
Alfred was divorced from Sarah Old in March 2017. Under the divorce agreement, Alfred is to pay Sarah $1,250 per month for the next 10 years or until Sarah's death, whichever occurs first. Alfred paid Sarah $15,000 in 2020. In addition, in January 2020, Alfred paid Sarah $50,000, which is designated as being for her share of the marital property. Also, Alfred is responsible for all prior years' income taxes. Sarah's Social Security number is 123-45-6788.
Alfred's salary for 2020 is $150,000. He is an executive working for Cherry, Inc. (Federal I.D. No. 98-7654321). As part of his compensation package, Cherry provides him with group term life insurance equal to twice his annual salary. His employer withheld $24,900 for Federal income taxes and $8,000 for state income taxes. The proper amounts were withheld for FICA taxes.
Beulah recently graduated from law school and is employed by Legal Aid Society, Inc. (Federal I.D. No. 11-1111111), as a public defender. She received a salary of $42,000 in 2020. Her employer withheld $7,500 for Federal income taxes and $2,400 for state income taxes. The proper amounts were withheld for FICA taxes.
Alfred and Beulah received taxable interest income of $500. Alfred and Beulah received a $1,900 refund on their 2019 state income taxes; they claimed the standard deduction on their 2019 Federal income tax return. Alfred and Beulah paid $4,500 interest and $1,450 property taxes on their personal residence in 2020. They paid sales taxes of $1,400, for which they maintain the receipts. Alfred and Beulah have never owned or used any virtual currency, and they do not want to contribute to the Presidential Election Campaign. Alfred and Beulah received the appropriate coronavirus recovery rebates (economic impact payments); related questions in ProConnect Tax should be ignored.
| Form 1040 | Department of the TreasuryInternal Revenue Service (99) U.S. Individual Income Tax Return | 2020 | OMB No. 1545-0074 | IRS Use Only | | Filing Status SingleMarried filing jointlyMarried filing separately (MFS)Head of household (with qualifying person) (HOH)Qualifying widow(er) (QW)Married filing jointly | | Your first name and middle initial Alfred E. Old | Last name | Your social security number 111-11-1109 | | If joint return, spouse's first name and middle initial Beulah A. Old | Last name | Spouse's social security number 123-45-6780 | | Home address (number and street). If you have a P.O. box, see instructions. 211 Blackstone Drive | Apt. no. | Presidential Election Campaign Check here if you, or your spouse if filing jointly, want $3 to go to this fund. Checking a box below will not change your tax or refund. YesNoNoneNone | | City, town, or post office. If you have a foreign address, also complete spaces below. Atlanta, GA 30304 | State | ZIP code | | Foreign country name | Foreign province/state/county | Foreign postal code | | | | | | | | | At any time during 2020, did you receive, sell, send, exchange, or otherwise acquire any financial interest in any virtual currency? | YesNoNo | | Standard Deduction | Someone can claim: You as a dependentYour spouse as a dependentSpouse itemizes on a separate return or you were a dual-status alienNoneNone | | Age/Blindness | You: Were born before January 2, 1956Are blindWere born before January 2, 1956, Are blindNoneNone Spouse: Was born before January 2, 1956Is blindWas born before January 2, 1956, Is blindNoneNone | | Dependents If more than four dependents, see instructions and check here | (see instructions): | (2) Social security number | (3) Relationship to you | (4) if qualifies for (see instructions): | | (1) First name | Last name | Child tax credit | Credit for other dependents | | | | | | | | | | | | | | | | | | | | | | | | | | | | Attach Sch. B if required. | 1 | Wages, salaries, tips, etc. Attach Form(s) W-2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 1 | fill in the blank 767d76fdefc302e_7 | | 2a | Tax-exempt interest . . | 2a | | b | Taxable interest . . . . . . . . . . | 2b | fill in the blank 767d76fdefc302e_8 | | 3a | Qualified dividends . . . | 3a | | b | Ordinary dividends . . . . . . . . | 3b | | | 4a | IRA distributions . . . . . | 4a | | b | Taxable amount . . . . . . . . . . | 4b | | | | 5a | Pensions and annuities | 5a | | b | Taxable amount . . . . . . . . . . | 5b | | Standard Deduction for - Single or Married filing separately, $12,400
- Married filing jointly or Qualifying widow(er), $24,800
- Head of household, $18,650
- If you checked any box under Standard Deduction, see instructions.
| 6a | Social security benefits | 6a | | b | Taxable amount . . . . . . . . . . | 6b | | | 7 | Capital gain or (loss). Attach Schedule D if required. If not required, check here . . . | 7 | | | 8 | Other income from Schedule 1, line 9 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 8 | fill in the blank 767d76fdefc302e_9 | | 9 | Add lines 1, 2b, 3b, 4b, 5b, 6b, 7, and 8. This is your total income . . . . . . . . . . . . . | 9 | fill in the blank 767d76fdefc302e_10 | | 10 | Adjustments to income: | | | | a | From Schedule 1, line 22 . . . . . . . . . . . . . . . . . . . . . . . . . . | 10a | fill in the blank 767d76fdefc302e_11 | | | | b | Charitable contributions if you take the standard deduction. See instructions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 10b | | | | | c | Add lines 10a and 10b. These are your total adjustments to income . . . . . . . . . . . | 10c | fill in the blank 767d76fdefc302e_12 | | 11 | Subtract line 10c from line 9. This is your adjusted gross income . . . . . . . . . . . . . . | 11 | fill in the blank 767d76fdefc302e_13 | | 12 | Standard deduction or itemized deductions (from Schedule A) . . . . . . . . . . . . . . . . | 12 | fill in the blank 767d76fdefc302e_14 | | 13 | Qualified business income deduction. Attach Form 8995 or Form 8995-A . . . . . . . . . . . . | 13 | | | 14 | Add lines 12 and 13 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 14 | fill in the blank 767d76fdefc302e_15 | | | 15 | Taxable income. Subtract line 14 from line 11. If zero or less, enter -0- . . . . . . . . . . . . | 15 | fill in the blank 767d76fdefc302e_16 | | BAA For Disclosure, Privacy Act, and Paperwork Reduction Act Notice, see separate instructions. | Form 1040 (2020) | |
