Question: Note: This problem is for the 2021 tax year. Logan B. Taylor is a widower whose wife, Sara, died on June 6, 2019. He lives
Note: This problem is for the 2021 tax year.
Logan B. Taylor is a widower whose wife, Sara, died on June 6, 2019. He lives at 4680 Dogwood Lane, Springfield, MO 65801. He is employed as a paralegal by a local law firm. During 2021, he had the following receipts:
Salary
$ 80,000
Interest income
Money market account at Omni Bank
$300
Savings account at Boone State Bank
1,100
City of Springfield general purpose bonds
3,000
4,400
Inheritance from Daniel
60,000
Life insurance proceeds
200,000
Amount from sale of St. Louis lot
80,000
Proceeds from estate sale
9,000
Federal income tax refund (for 2020 tax overpayment)
700
Logan inherited securities worth $60,000 from his uncle, Daniel, who died in 2021. Logan also was the designated beneficiary of an insurance policy on Daniel's life with a maturity value of $200,000. The lot in St. Louis was purchased on May 2, 2016, for $85,000 and held as an investment. Because the neighborhood has deteriorated, Logan decided to cut his losses and sold the lot on January 5, 2021, for $80,000. The estate sale consisted largely of items belonging to Sara and Daniel (e.g., camper, boat, furniture, and fishing and hunting equipment). Logan estimates that the property sold originally cost at least twice the $9,000 he received and has declined or stayed the same in value since Sara and Daniel died.
Logan's expenditures for 2021 include the following:
Medical expenses (including $10,500 for dental)
$13,500
Taxes
State of Missouri income tax (includes withholdings during 2021)
$4,200
Property taxes on personal residence
4,500
8,700
Interest on home mortgage (Boone State Bank)
5,600
Contribution to church (paid pledges for 2021 and 2022)
4,800
While Logan and his dependents are covered by his employer's health insurance policy, he is subject to a deductible, and dental care is not included. The $10,500 dental charge was for Helen's implants. Helen is Logan's widowed mother, who lives with him (see below). Logan normally pledges $2,400 ($200 per month) each year to his church. On December 5, 2021, upon the advice of his pastor, he prepaid his pledge for 2022.
Logan's household, all of whom he supports, includes the following:
Social Security Number
Birth Date
Logan Taylor (age 48)
123-45-6787
08/30/1973
Helen Taylor (age 70)
123-45-6780
01/13/1951
Asher Taylor (age 23)
123-45-6783
07/18/1998
Mia Taylor (age 22)
123-45-6784
02/16/1999
Helen receives a modest Social Security benefit. Asher, a son, is a full-time student in dental school and earns $4,500 as a part-time dental assistant. Mia, a daughter, does not work and is engaged to be married.
Federal income tax of $4,200 was withheld from his wages.
Required:
Compute Logan's income tax for 2021. If Logan has any overpayment on his income tax, he wants the refund sent to him. Assume that the proper amounts of Social Security and Medicare taxes were withheld. Logan received the appropriate coronavirus recovery rebates (economic impact payments); related questions in ProConnect Tax should be ignored. Logan does not own and did not use any virtual currency during the year, and he does not want to contribute to the Presidential Election Campaign Fund.
Make realistic assumptions about any missing data.
Enter all amounts as positive numbers except any losses. Use the minus sign to indicate a loss.
If an amount box does not require an entry or the answer is zero, enter "0".
It may be necessary to complete the other tax schedules before completing Form 1040.
Use the included tax rate schedules to compute the tax. When computing the tax liability, do not round your immediate calculations. If required round your final answers to the nearest dollar.plete Form 1040 below for Logan Taylor.
Form
1040
Department of the TreasuryInternal Revenue Service (99)U.S. Individual Income Tax Return
2021
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)Qualifying widow(er) (QW)
Your first name and middle initial Logan B. Taylor
Last name
Your social security number 123-45-6787
If joint return, spouse's first name and middle initial
Last name
Spouse's social security number
Home address (number and street). If you have a P.O. box, see instructions. 4680 Dogwood Lane
Apt. no.
Presidential Election Campaign Doyou, or your spouse if filing jointly, want $3 to go to this fund. Selecting an option below will not change your tax or refund.
YesNoNo
City, town, or post office. If you have a foreign address, also complete spaces below. Springfield, MO 65801
State
ZIP code
Foreign country name
Foreign province/state/county
Foreign postal code
At any time during 2021, did you receive, sell, exchange, or otherwise dispose of 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, 1957Are blindWere born before January 2, 1957, Are blindNoneNone
Spouse:
Was born before January 2, 1957Is blindWas born before January 2, 1957, Is blindNoneNone
Dependents If more than four dependents, see instructions and check here
Check here if you were born after January 1, 1998, and before January 2, 2004, and you satisfy all the other requirements for taxpayers who are at least age 18, to claim the EIC. See instructions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Do you want to allow another person to discuss this return with the IRS? See instructions.
Yes. Complete below. No
Designee's name
Phone no.
Personal identification number (PIN)
SignHere Joint return? See instructions. Keep a copy for your records.
Under penalties of perjury, I declare that I have examined this return and accompanying schedules and statements, and to the best of my knowledge and belief, they are true, correct, and complete. Declaration of preparer (other than taxpayer) is based on all information of which preparer has any knowledge.
Your signature
Date
Your occupation Paralegal
If the IRS sent you an Identity Protection PIN, enter it here
(see inst.)
Spouse's signature. If a joint return, both must sign.
Date
Spouse's occupation
If the IRS sent your spouse an Identity Protection PIN, enter it here
(see inst.)
Phone no.
Email address
Paid Preparer Use Only
Preparer's name
Preparer's signature Self-Prepared
Date
PTIN
Check if: Self-employed
Firm's name
Phone no.
Firm's address
Firm's EIN
Go to www.irs.gov/Form1040 for instructions and the latest information.
Form 1040 (2021)
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