Please prepare the tax return for 2018. Using these forms.

Daniel B Butler and Freida C. Butler, husband and wife, file a joint return. The butlers live at 625 Oak Street in Corbin, KY 40701. Dan's Social Security number is 111-11-1112, and Freida's is 123-45-6789. Dan was born on January 15, 1966, and Freida was born on August 20, 1967 g 2017, Dan and Freida furnished over half of the total support of each of the Durin following individuals, all of whom still live at home. Gina, their daughter, age 22, a full-time college student, has no income of her own. Gina's Social Security number is 123-45-6788. a) b) Sam, their son, ag e 20, who had gross income of $6,300 in 2017. He graduated from high school on May 15th 2017, Started College on August 21st 2017, then dropped out of college in September 2017. Sam's Social Security number is 123-45-6787. c) Ben, their oldest son, age 26, is a full-time graduate student with gross income of $5,200. Ben's Social Security number is 123-45-6786. Dan was employed as a manager by WI]I, Inc. (employer identification number 11- 1111111, 604 Franklin street, Corbin, KY 40702), and Freida was employed as a salesperson for Corbin Realty, Inc. (employer identification number 98-7654321,899 Central Street, Corbin, KY 40701). Selected information from the W-2 Forms provided by the employers is presented below. Dan and Freida use the cash method Freida $81,000 11,400 3,040 Line Description Dan $71,000 11,000 2,560 Wages, tips, other compensation 2 Federal income tax withheld 17 State income tax withhelod Freida sold a house (as part of her job as a real estate agent) on December 30, 2017, and will be paid a commission of $3,100 (not included in the $81,000 reported on the W-2) on the January 10, 2018 closing date Before marrying Freida, Dan was married and divorced to Sarah. Dan and Sarah have a daughter together; Sarah has custody of this child and claims her as a dependent. Under the divorce agreement, Dan is to pay Sarah $500 per month in alimony and $200 in child support ($700 in total per month). Dan timely made his $700 payment to Sarah each month, except for December. Dan's December payment was late, and paid in January of 2018 The Butlers also had (1) $1,600 in interest income from their savings account (23 Sale of ABC stock on 8/15/2017 for $10,000 (originally purchased for $4,000 on 1/15/2013) 3) Sale of XYz stock on 10/15/2017 for $3,000 (originally purchased for $4,000 on 12/15/2016) (4 Sale of a boat on 5/15/2017 for $10,000 used for personal recreation (originally purchased for $20,000 on 6/15/2012) (6) The Butlers paid $2,400 in property taxes on their primary residence (5) Interest on the Butlers personal residence is $4,000 (Assume this is tax deductible) (7) The Butlers made a $3,000 cash contribution to a qualified charitable organization Prepare the 2017 &2018 Federal income tax return for the Butlers'. You may work in groups no larger than 3 (i.e. 1, 2, or 3). Submit one tax return per group. Please submit (1) a cover page with a list of students who participated in the group project, (2) Form 1040, (3) Schedule A (if needed), (4) calculation of Capital gain (including LT or ST), (5) items 2 and 3 for 2018, and (6) calculation of tax for both 2017 &2018 tax returns. Hints: 1) Don't forget to check the box for the filing status 2) Review the rules as for what qualifies as a "student" for purposes of the Qualifying Child tests. See IRS publication 501 page 13 3) Make sure you are using 2017 information (i.e. personal exemptions, standard deduction, tax brackets etc.) for the 2017 return, and 2018 information for the 2018 return. 4) Normally interest and capital gains would require additional forms (Schedule B and Schedule D). However for this assignment do not prepare those forms/schedules simply entr the appropriate amount directly onto form 1040. 5) If the then Syhed o Aneeds to be e e total of the Schedule A needs to agree to line 40 (2017)/line 8 (2018) on form 1040. 6) Prepare the 2017 & 2018 tax returns on the 2017 & 2018 form 1040. 7) Assume that the Butlers had adequate health insurance coverage. 8 nore 9) The taxpayer has a refund. any tax credits Including anything related to tuition (i.e.hope scholarship) or 10) All income/deduction items should be exactly the same between 2017 &2018. That is, when preparing the 2018 return support, etc. in 2018 as in 2017 sugpprt, tic in 201h0ssime thie same capital gains,alimony /child 1040218 Department of the Treasury-Internal Revenue Service U.S. Individual Income Tax Return (99) Ice)1 8 OMB No. 1545-0074 IRS Use Only-Do not wite or staple in this spa Filing status:SingleMarntied fling jointy Maried ling separately Head ot housohold Your first name and initial Quallying widowfern Last name Your social security numbe Your standard deduction:Someone can claim you as a dependent You were born before If joint returm, spouse's first name and initial January 2, 1954 You aro blnd Last name Spouse's social security nun Spouse standard deduction: Someone can claim your spouse as a depenentSpouse was bom before January 2, 1954 Full-year health care cove or exempt (see inst.) see inst.) If more than four dependents Spouse is blind Spouse atemizes on a separate retum or you were dual-status alien Home address (number and street). If you have a P.O. box, see instructions City, town or post office, state, and ZiP code. If you have a foreign address, attach Schedule 6. Dependents (see instructions): Apt. no. Presidential Election Campaig You Spe see inst. and /here (2) Social security number (3) Relationship to you (4) /Iit quaifies for (see inst) (1) First name Last name Child tax credit Credit for other depende Under penaltses of porjury, I declare that I have examined t correct, and complete. Daciaration of preparer (other than taxpaye) in based on all nformation of which his neturn and accompanying schedules and statements, and to the best of my knowledge and beliof, thay are tru Sign Here oint retum? ee instructions eep a copy for our records preparer has any knowledge it the IRS sent you an identity Prote PIN, enter it here (see inst Your signature Date Your occupation the IRS sent you an Identity Prote PIN, enter it here fsee inst) Spouse's signature. If a joint return, both must sign. Date Spouse's occupation Preparer's name Preparer's signature PTIN Firm's EIN Check it aid reparer 3rd Party Desig Sell-cmployed se Only Firmis address Firm's name Firm's address Phone no or Disclosure, Privacy Act, and Paperwork Reduction Act Notice, see separate instructions. Cat. No. 113208 Fom 1040c Form 1040 (2018) 1 Wages, salaries, tips, etc. Attach Form(s) W-2. 2a Tax-exempt interest b Taxable interest . b Ordinary dividends b Taxable amount4b b Taxable amount5b 2b Altach Foms W-2. Also attach3a Qualified dividends Forns) W-2G and 1099-R itax was 4a IRAs, pensions, and annuities witheld 2a 4a 3b Sa Social security benefits 6 Total Income, Add Iines 1 through 5. Add any amount from Schedule 1, line 22 7 Adjusted gross income. If you have no adjustments to Income, enter the amount from ine 6; otherwise, Standardsubtract Schedule 1, Ine 36, from line 6 Deduction for-8 Standard deduction or itemized deductions (from Schedule A)8 Single or married ting separatoly, $12.000 9 Qualified business income deduction (see instructions). IO Taxable noorme. Sut tract lines 8 and 9 from line 7. If zero or less, enter-O. .. 10 . . . . . Maried filing jointly or Qualiying 11 widow(er). 24,000 a Tax (see inst) b Add any amount from Schedule 2 and check here 12 aChild tax credit/aredit for other dependents b Add any amount from Schedule 3 and check hare 12 e Head of household $18,000 13 13 Subtract line 12 from line 11, If zero or less, enter -0 iF you checked 14 Other taxes. Attach Schedule 4. any box under 15 Standard deduction, see instructions 15 Total tax. Add ines 13and 14 . . . . . . . 16 Federal income tax withheld from Forms W-2 and 1099 . . . . .. " . . . 16 17 Refundable credits: a EIC (see Inst.) Add any amount from Schedule 5 b Sch, 8812 Form 8863 18 18 Add lines 16 and 17. These are your total payments 19 If line 18 is more than line 15, subtract line 15 from line 16. This is the amount you overpaid 20a Amount of line 19 you want refunded to you. If Form 8888 is attached, check here 20a Dreat deposit? b Routing number See instructions e Type: Cheoking Savings d Account number Amount of line 19 you want 2019 estimated tax Amount You Owe 22 Amount you owe, Subtract ine 18 from line 15. For details on how to pay, see instructions 23 23 Estimated tax penalty (see Instructione) Fomn 1040 c Go to www.irs.gowForm 1040 for instructions and the latest information (Form 1040) Itemized Deductions 201 Go to Intemal Revenue ServicCaution: # you are claiming a net oss on Form 4684, see the instructions for line 28 Caution: Do not include expenses reimbursed or paid by others Medical and dental expenses (see instructions) Enter amount from Form 1040, line 38 and Dental Expenses 3 Multiply ine 2 by 75% (0.075). axes You 5 State and local (check only one box) 1 2 4 Subtract line 3 from line 1. It line 3 is more than line 1 enter-O a Income taxes, or b General sales taxes 6 Real estate taxes (see instructions). 7 Personal property taxes 8 Other taxes. List type and amount Add lines 5 through 8 Home mortgage interest and points reported to you on Form 1098 10 Home mortgage interest not reported to you on Form 1098. If paid to the person from whom you bought the home, see instructions and show that person's name, identifying no., and address 9 terest u Paid 10 11 te: r mortgage uction may mited (see 12 Point uctions). ts not reported to you on Form 1098. See instructions for 12 13 14 special rules 13 Mortgage insurance premiums (see instructions) 14 Investment interest. Attach Form 4952 if required. See instructions 15 Add lines 10 through 14 15 to 16 Gifts by cash or check. If you made any gift of $250 or more, ity made a 17 Other than by cash or check. If any gift of $250 or more, see dgot a for it, 18 Carryover from prior year.. 16 see instructions. .. - 17 instructions. You must attach Form 8283 if over $500 . . . nuctions. 19 Add lines 16 through 18 y and 20 Casualty or theft loss(es) other than net qualified disaster losses. Attach Form 4684 and enter the amount from line 18 of that form. See instructions enses 21 Unreimbursed employee expenses-job travel, union dues, ain job education, etc. Attach Form 2106 or 2106-EZ if required. See instructions. eous ns 22 Tax preparation fees . . . 23 Other expenses-investment, safe deposit box, etc. List type and amount 23 24 24 Add lines 21 through 23. . 25 Enter amount from Form 1040, line 38 25 26 Multiply line 25 by 2% (0.02) 27 Subtract line 26 from line 24. If line 26 is more than line 24, enter -0-... 28 Other-from list in instructions. List type and amount 26 us 29 Is Form 1040, line 38. over $156.9002 SCHEDULE1 Form 1040) epartment of the Treasury Additional Income and Adjustments to Income OMB No. 1545-0074 2018 Attach to Form 1040. Go to www.irs.gov/Form1040 for instructions and the latest information. ternal Revenue Service lame(s) shown on Fom 1040 Your social security number Additional 1-9b Reserved ncome 1-9b 10 Taxable refunds, credits, or offsets of state and local income taxes...10 11 Alimony received ...11 12 Business income or (loss). Attach Schedule C or C-EZ . . 13 Capital gain or (loss). Attach Schedule D if required. If not required, check here 13 . . . . 15b 17 Rental real estate, royalties, partnerships, S corporations, trusts, etc. Attach Schedule E 17 19 Unemployment compensation . . . . - 20a Reserved.. 21 Other income. List type and amount 22 Combine the amounts in the far right column. If you don't have any adjustments to 19 ...20b 21 income, enter here and include on Form 1040, line 6. Otherwise, go to line 23 justments 23 Educator expenses.. Income 24 Certain business expenses of reservists, performing artists, and fee-basis government officials. Attach Form 2106.24 Health savings account deduction. Attach Form 8889-125 Moving expenses for members of the Armed Forces. Attach Form 3903. 25 26 27 Deductible part of self-employment tax. Attach Schedule SE 27 28 Self-employed SEP, SIMPLE, and qualified plans28 29 Self-employed health insurance deduction 30 Penalty on early withdrawal of savings 31a Alimony paid b Recipient's SSN 32 IRA deduction 33 Student loan interest deduction 34 Reserved.. 35 Reserved. 36 Add lines 23 through 35 31a . 34 36 Paperwork Reduction Act Notice, see your tax return ins tructions. Cat. No. 71479 Schedule 1 (Form 1040) 2018 Daniel B Butler and Freida C. Butler, husband and wife, file a joint return. The butlers live at 625 Oak Street in Corbin, KY 40701. Dan's Social Security number is 111-11-1112, and Freida's is 123-45-6789. Dan was born on January 15, 1966, and Freida was born on August 20, 1967 g 2017, Dan and Freida furnished over half of the total support of each of the Durin following individuals, all of whom still live at home. Gina, their daughter, age 22, a full-time college student, has no income of her own. Gina's Social Security number is 123-45-6788. a) b) Sam, their son, ag e 20, who had gross income of $6,300 in 2017. He graduated from high school on May 15th 2017, Started College on August 21st 2017, then dropped out of college in September 2017. Sam's Social Security number is 123-45-6787. c) Ben, their oldest son, age 26, is a full-time graduate student with gross income of $5,200. Ben's Social Security number is 123-45-6786. Dan was employed as a manager by WI]I, Inc. (employer identification number 11- 1111111, 604 Franklin street, Corbin, KY 40702), and Freida was employed as a salesperson for Corbin Realty, Inc. (employer identification number 98-7654321,899 Central Street, Corbin, KY 40701). Selected information from the W-2 Forms provided by the employers is presented below. Dan and Freida use the cash method Freida $81,000 11,400 3,040 Line Description Dan $71,000 11,000 2,560 Wages, tips, other compensation 2 Federal income tax withheld 17 State income tax withhelod Freida sold a house (as part of her job as a real estate agent) on December 30, 2017, and will be paid a commission of $3,100 (not included in the $81,000 reported on the W-2) on the January 10, 2018 closing date Before marrying Freida, Dan was married and divorced to Sarah. Dan and Sarah have a daughter together; Sarah has custody of this child and claims her as a dependent. Under the divorce agreement, Dan is to pay Sarah $500 per month in alimony and $200 in child support ($700 in total per month). Dan timely made his $700 payment to Sarah each month, except for December. Dan's December payment was late, and paid in January of 2018 The Butlers also had (1) $1,600 in interest income from their savings account (23 Sale of ABC stock on 8/15/2017 for $10,000 (originally purchased for $4,000 on 1/15/2013) 3) Sale of XYz stock on 10/15/2017 for $3,000 (originally purchased for $4,000 on 12/15/2016) (4 Sale of a boat on 5/15/2017 for $10,000 used for personal recreation (originally purchased for $20,000 on 6/15/2012) (6) The Butlers paid $2,400 in property taxes on their primary residence (5) Interest on the Butlers personal residence is $4,000 (Assume this is tax deductible) (7) The Butlers made a $3,000 cash contribution to a qualified charitable organization Prepare the 2017 &2018 Federal income tax return for the Butlers'. You may work in groups no larger than 3 (i.e. 1, 2, or 3). Submit one tax return per group. Please submit (1) a cover page with a list of students who participated in the group project, (2) Form 1040, (3) Schedule A (if needed), (4) calculation of Capital gain (including LT or ST), (5) items 2 and 3 for 2018, and (6) calculation of tax for both 2017 &2018 tax returns. Hints: 1) Don't forget to check the box for the filing status 2) Review the rules as for what qualifies as a "student" for purposes of the Qualifying Child tests. See IRS publication 501 page 13 3) Make sure you are using 2017 information (i.e. personal exemptions, standard deduction, tax brackets etc.) for the 2017 return, and 2018 information for the 2018 return. 4) Normally interest and capital gains would require additional forms (Schedule B and Schedule D). However for this assignment do not prepare those forms/schedules simply entr the appropriate amount directly onto form 1040. 5) If the then Syhed o Aneeds to be e e total of the Schedule A needs to agree to line 40 (2017)/line 8 (2018) on form 1040. 6) Prepare the 2017 & 2018 tax returns on the 2017 & 2018 form 1040. 7) Assume that the Butlers had adequate health insurance coverage. 8 nore 9) The taxpayer has a refund. any tax credits Including anything related to tuition (i.e.hope scholarship) or 10) All income/deduction items should be exactly the same between 2017 &2018. That is, when preparing the 2018 return support, etc. in 2018 as in 2017 sugpprt, tic in 201h0ssime thie same capital gains,alimony /child 1040218 Department of the Treasury-Internal Revenue Service U.S. Individual Income Tax Return (99) Ice)1 8 OMB No. 1545-0074 IRS Use Only-Do not wite or staple in this spa Filing status:SingleMarntied fling jointy Maried ling separately Head ot housohold Your first name and initial Quallying widowfern Last name Your social security numbe Your standard deduction:Someone can claim you as a dependent You were born before If joint returm, spouse's first name and initial January 2, 1954 You aro blnd Last name Spouse's social security nun Spouse standard deduction: Someone can claim your spouse as a depenentSpouse was bom before January 2, 1954 Full-year health care cove or exempt (see inst.) see inst.) If more than four dependents Spouse is blind Spouse atemizes on a separate retum or you were dual-status alien Home address (number and street). If you have a P.O. box, see instructions City, town or post office, state, and ZiP code. If you have a foreign address, attach Schedule 6. Dependents (see instructions): Apt. no. Presidential Election Campaig You Spe see inst. and /here (2) Social security number (3) Relationship to you (4) /Iit quaifies for (see inst) (1) First name Last name Child tax credit Credit for other depende Under penaltses of porjury, I declare that I have examined t correct, and complete. Daciaration of preparer (other than taxpaye) in based on all nformation of which his neturn and accompanying schedules and statements, and to the best of my knowledge and beliof, thay are tru Sign Here oint retum? ee instructions eep a copy for our records preparer has any knowledge it the IRS sent you an identity Prote PIN, enter it here (see inst Your signature Date Your occupation the IRS sent you an Identity Prote PIN, enter it here fsee inst) Spouse's signature. If a joint return, both must sign. Date Spouse's occupation Preparer's name Preparer's signature PTIN Firm's EIN Check it aid reparer 3rd Party Desig Sell-cmployed se Only Firmis address Firm's name Firm's address Phone no or Disclosure, Privacy Act, and Paperwork Reduction Act Notice, see separate instructions. Cat. No. 113208 Fom 1040c Form 1040 (2018) 1 Wages, salaries, tips, etc. Attach Form(s) W-2. 2a Tax-exempt interest b Taxable interest . b Ordinary dividends b Taxable amount4b b Taxable amount5b 2b Altach Foms W-2. Also attach3a Qualified dividends Forns) W-2G and 1099-R itax was 4a IRAs, pensions, and annuities witheld 2a 4a 3b Sa Social security benefits 6 Total Income, Add Iines 1 through 5. Add any amount from Schedule 1, line 22 7 Adjusted gross income. If you have no adjustments to Income, enter the amount from ine 6; otherwise, Standardsubtract Schedule 1, Ine 36, from line 6 Deduction for-8 Standard deduction or itemized deductions (from Schedule A)8 Single or married ting separatoly, $12.000 9 Qualified business income deduction (see instructions). IO Taxable noorme. Sut tract lines 8 and 9 from line 7. If zero or less, enter-O. .. 10 . . . . . Maried filing jointly or Qualiying 11 widow(er). 24,000 a Tax (see inst) b Add any amount from Schedule 2 and check here 12 aChild tax credit/aredit for other dependents b Add any amount from Schedule 3 and check hare 12 e Head of household $18,000 13 13 Subtract line 12 from line 11, If zero or less, enter -0 iF you checked 14 Other taxes. Attach Schedule 4. any box under 15 Standard deduction, see instructions 15 Total tax. Add ines 13and 14 . . . . . . . 16 Federal income tax withheld from Forms W-2 and 1099 . . . . .. " . . . 16 17 Refundable credits: a EIC (see Inst.) Add any amount from Schedule 5 b Sch, 8812 Form 8863 18 18 Add lines 16 and 17. These are your total payments 19 If line 18 is more than line 15, subtract line 15 from line 16. This is the amount you overpaid 20a Amount of line 19 you want refunded to you. If Form 8888 is attached, check here 20a Dreat deposit? b Routing number See instructions e Type: Cheoking Savings d Account number Amount of line 19 you want 2019 estimated tax Amount You Owe 22 Amount you owe, Subtract ine 18 from line 15. For details on how to pay, see instructions 23 23 Estimated tax penalty (see Instructione) Fomn 1040 c Go to www.irs.gowForm 1040 for instructions and the latest information (Form 1040) Itemized Deductions 201 Go to Intemal Revenue ServicCaution: # you are claiming a net oss on Form 4684, see the instructions for line 28 Caution: Do not include expenses reimbursed or paid by others Medical and dental expenses (see instructions) Enter amount from Form 1040, line 38 and Dental Expenses 3 Multiply ine 2 by 75% (0.075). axes You 5 State and local (check only one box) 1 2 4 Subtract line 3 from line 1. It line 3 is more than line 1 enter-O a Income taxes, or b General sales taxes 6 Real estate taxes (see instructions). 7 Personal property taxes 8 Other taxes. List type and amount Add lines 5 through 8 Home mortgage interest and points reported to you on Form 1098 10 Home mortgage interest not reported to you on Form 1098. If paid to the person from whom you bought the home, see instructions and show that person's name, identifying no., and address 9 terest u Paid 10 11 te: r mortgage uction may mited (see 12 Point uctions). ts not reported to you on Form 1098. See instructions for 12 13 14 special rules 13 Mortgage insurance premiums (see instructions) 14 Investment interest. Attach Form 4952 if required. See instructions 15 Add lines 10 through 14 15 to 16 Gifts by cash or check. If you made any gift of $250 or more, ity made a 17 Other than by cash or check. If any gift of $250 or more, see dgot a for it, 18 Carryover from prior year.. 16 see instructions. .. - 17 instructions. You must attach Form 8283 if over $500 . . . nuctions. 19 Add lines 16 through 18 y and 20 Casualty or theft loss(es) other than net qualified disaster losses. Attach Form 4684 and enter the amount from line 18 of that form. See instructions enses 21 Unreimbursed employee expenses-job travel, union dues, ain job education, etc. Attach Form 2106 or 2106-EZ if required. See instructions. eous ns 22 Tax preparation fees . . . 23 Other expenses-investment, safe deposit box, etc. List type and amount 23 24 24 Add lines 21 through 23. . 25 Enter amount from Form 1040, line 38 25 26 Multiply line 25 by 2% (0.02) 27 Subtract line 26 from line 24. If line 26 is more than line 24, enter -0-... 28 Other-from list in instructions. List type and amount 26 us 29 Is Form 1040, line 38. over $156.9002 SCHEDULE1 Form 1040) epartment of the Treasury Additional Income and Adjustments to Income OMB No. 1545-0074 2018 Attach to Form 1040. Go to www.irs.gov/Form1040 for instructions and the latest information. ternal Revenue Service lame(s) shown on Fom 1040 Your social security number Additional 1-9b Reserved ncome 1-9b 10 Taxable refunds, credits, or offsets of state and local income taxes...10 11 Alimony received ...11 12 Business income or (loss). Attach Schedule C or C-EZ . . 13 Capital gain or (loss). Attach Schedule D if required. If not required, check here 13 . . . . 15b 17 Rental real estate, royalties, partnerships, S corporations, trusts, etc. Attach Schedule E 17 19 Unemployment compensation . . . . - 20a Reserved.. 21 Other income. List type and amount 22 Combine the amounts in the far right column. If you don't have any adjustments to 19 ...20b 21 income, enter here and include on Form 1040, line 6. Otherwise, go to line 23 justments 23 Educator expenses.. Income 24 Certain business expenses of reservists, performing artists, and fee-basis government officials. Attach Form 2106.24 Health savings account deduction. Attach Form 8889-125 Moving expenses for members of the Armed Forces. Attach Form 3903. 25 26 27 Deductible part of self-employment tax. Attach Schedule SE 27 28 Self-employed SEP, SIMPLE, and qualified plans28 29 Self-employed health insurance deduction 30 Penalty on early withdrawal of savings 31a Alimony paid b Recipient's SSN 32 IRA deduction 33 Student loan interest deduction 34 Reserved.. 35 Reserved. 36 Add lines 23 through 35 31a . 34 36 Paperwork Reduction Act Notice, see your tax return ins tructions. Cat. No. 71479 Schedule 1 (Form 1040) 2018