Question is how do I complete the following forms with the following scenario? 1. Form 1040 2.
Question:
Question is how do I complete the following forms with the following scenario?
1. Form 1040
2. Schedule 1
3. Schedule 3
4. Schedule B
5. Schedule C
6. Schedule SE
Scenario:
In 2020, Han (SSN 000-11-1111) and Leia (SSN 000-22-2222) were married for the entire year. They have one child, Ben Solo (SSN 000-33-3333), who was age 19 at the end of 2020 who is also a full time student at Death Star University majoring where his parents provided more than 50% of his support. Ben Solo was unmarried at the end of 2020 and reported no income for the year. The Solos will not claim the Education Credit for Ben Solo. The Solos also had their 40 year old friend, Chewbacca, living with them for 10 months out of the year since getting laid off as a copilot from his aviation job. The Solos provided more than ½ of his support. Chewbacca made $1,000 in 2020 in W2 wages.
The Solos' residential and mailing address is: 2000 Millenium Falcon Way, Mustafar, MD 24629
The following income and itemized deductions were incurred during tax year 2020:
Taxpayer | Employer | W-2 Income | Federal Taxes W/H |
Han Solo | Jabba's Hut | $100,000 | $21,000 |
Leia Solo | Wookie, LLC | $5,500 | $1,500 |
Taxpayer | Payor | 1099-Int (interest income) | Federal Taxes W/H |
Leia Solo | Imperial Savings | $2,000 | $0 |
Leia Solo | Skywalker Savings | $7,000 (from municipal bonds) | $0 |
The Solos do not hold any foreign financial assets, trust or bank accounts in a foreign county.
Itemized Expenses | Itemized Deductions |
Mortgage Interest | $12,000 |
Property Taxes | $5,000 |
The standard deduction for 2020 is $24,800. Remember, you can only claim either the higher of itemized deductions or the standard.
Leia Solo's also reported Self Employment income from Uber. Leia drives her car for both business and personal use. Here is the following info:
Gross Receipts | $10,000 |
Insurance | $350 (business portion) |
Car Repairs | $450 (business portion) |
Business License | $120 |
Business Usage of Cell Phone | $200 |
Commuting Miles | Business Miles | Total Miles Driven |
7,000 | 5,000 | 12,000 |
Since Leia was not consistently performing as an Uber driver for the year, she has elected to NOT claim the Qualified Business Income Deduction (Form 8995). She will not elect to depreciate her vehicle since she will be claiming mileage.
Leia also made estimated Federal tax payments totaling $1,000 for tax year 2020.
Forms are below:
Form 1040
Schedule 1
Schedule 3
Schedule B
Schedule C
Schedule SE