TAX FORM/RETURN PREPARATION PROBLEM Using the information in Problem I:7-62 for Dan and Cheryl, prepare a Form 1040, including Schedule 1, 2, and 3, Schedule A, C, D, and SE, and Forms 8283, 8949 and 8995 for 2019. 1:7-62 Dan M. and Cheryl A. Peters are married, file a joint return, and have no children. Dan, age 45, is an independent contractor working in pharmaceutical sales and Cheryl, age 42, is a nurse at a local hospital. Dan's SSN is 400-20-0000 and Cheryl's SSN is 200-40-0000 and they reside at 2033 Palmetto Drive, Atlanta, GA 30304. Dan is paid according to commissions from sales, and he has no income tax or payroll tax withholdings. Dan oper- ates his business from his home office. During 2019, Dan earned total commissions in his business of $125,000. Cheryl earned a salary during 2019 of $45,400, with the following withholdings: $6,000 federal taxes, $1,800 state taxes, $2,815 OASDI (Social Security), and $658 Medicare taxes. During 2019, Dan and Cheryl had interest income from corporate bonds and bank ac- counts of $1,450 and qualified dividends from stocks of $5,950. Dan also actively trades stocks and had the following results for 2019: LTCG $4,900 LTCL (3,200) STCG 0 STCL (7,800) He had no capital loss carryovers from previous years. Basis for the stocks were re- ported to the IRS by the brokerage firm. Dan does a considerable amount of travel in connection with his business and uses his own car. During 2019, Dan drove his car a total of 38,000 miles, of which 32,000 were business related. He also had business-related parking fees and tolls during the year of $280. Dan uses the mileage method for deducting auto expenses. Dan also had the follow- ing travel expenses while away from home during the year: Hotel $4,200 Meals 820 Entertainment of customers 1,080 Tips 100 Laundry and cleaning 150 Total $6,350 Dan uses the simplified method to deduct expenses for his office-in-home. His office measures 15 feet by 12 feet in size. Cheryl incurred several expenses in connection with her nursing job. She paid $450 in professional dues, $200 in professional journals, and $350 for uniforms. Dan and Cheryl had the following other expenditures during the year: Health insurance premiums (after-tax) $ 4,400 Doctor bills Real estate taxes on home 6,800 Personal property taxes 1,400 Mortgage interest-all deductible 7,400 Charitable contributionscash 9,000 Chat able contributions-Apple stock owned for 5 years: FMV $8,000 Adjusted basis 2,000 Tax preparation fees ($250 allocated to Dan's business) 750 Paid by Dan in connection with his business. 470 1040 2019 Department of the Treasury-Internal Revenue Service (99) U.S. Individual Income Tax Return OMB No 1545-0074 IRS Use Only-Do not write or staple in this space. Filing Status Single Married filing jointly Married filing separately (MFS) Head of household (HOH) Qualifying widow(er) (QW) Check only If you checked the MFS box, enter the name of spouse. If you checked the HOH or QW box, enter the child's name if the qualifying person is one box. a child but not your dependent Your first name and middle initial Last name Your social security number 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. Apt. no. Presidential Election Campaign Check here if you, or your spouse if filing jointly, want $3 to go to this fund. City, town or post office, state, and ZIP code. If you have a foreign address, also complete spaces below (see instructions) Checking a box below will not change your tax or refund. You Spouse Foreign country name Foreign province/state/county Foreign postal code of more than four dependents, see instructions and here Standard Someone can claim: You as a dependent Your spouse as a dependent Deduction Spouse itemizes on a separate return or you were a dual-status alien Age/Blindness You: Were born before January 2, 1955 Are blind Spouse: Was born before January 2, 1955 Is blind Dependents (see instructions): (2) Social security number (3) Relationship to you 3 (4) If qualifies for (see instructions): (1) First name Last name Child tax credit Credit for other dependents . 1 2b 3b + 4b 4d 5b 6 7a 1 Wages, salaries, tips, etc. Attach Form(s) W-2, 2a Tax-exempt interest. 2a b Taxable interest. Attach Sch. Bit required 3a Qualified dividends. 3a b Ordinary dividends. Attach Sch. Bit required Standard Deduction for 4a IRA distributions. 4a b Taxable amount Single or Married 40 Pensions and annuities filing separately, d Taxable amount $12,200 5a Social security benefits . 5a b Taxable amount Married filing 6 Capital gain or loss). Attach Schedule D if required. If not required, check here O jointly or Qualifying widow(er). 7a Other income from Schedule 1, line 9. $24.400 Head of b Add lines 1, 2b, 3b, 46, 4d, 5b, 6, and 7a. This is your total income household 8a Adjustments to income from Schedule 1, line 22 If you checked b Subtract line Ba from line 7b. This is your adjusted gross income any box under Standard 9 Standard deduction or itemized deductions (from Schedule A). 9 Deduction, 10 Qualified business income deduction. Attach Form 8995 or Form 8995-A A 10 see instructions. 11a Add lines 9 and 10 Taxable income. Subtract line 11a from line 8b. If zero or less, enter-O- For Disclosure, Privacy Act, and Paperwork Reduction Act Notice, see separate instructions. Cat. No. 113200 7b Ba $18,350 Bb 11a 11b Form 1040 (2019) - e Form 1040 (2019) Page 2 12a Tax (see inst.) Check if any from Form(s): 1 8814 2 4972 3 12a b , Add Schedule 2, line 3, and line 12a and enter the total 12b 13a Child tax credit or credit for other dependents . 13a b Add Schedule 3, line 7, and line 13a and enter the total 13b 14 Subtract line 13b from line 12b. If zero or less, enter-O- 14 15 Other taxes, including self-employment tax, from Schedule 2, line 10 15 16 Add lines 14 and 15. This is your total tax.. 16 17 Federal income tax withheld from Forms W-2 and 1099 2 17 18 . If you have a Other payments and refundable credits: qualifying child Earned income credit (EIC). 18a attach Sch. EIC. b Additional child tax credit. Attach Schedule 8812 If you have 18b nontaxable American opportunity credit from Form 8863, line 8 18c combat pay, see instructions. d Schedule 3, line 14 18d Add lines 18a through 18d. These are your total other payments and refundable credits 18e 19 Add lines 17 and 18e. These are your total payments 19 Refund 20 If line 19 is more than line 16, subtract line 16 from line 19. This is the amount you overpaid 20 21a Amount of line 20 you want refunded to you. If Form 8888 is attached, check here 21a Direct deposit? Routing number c Type: Ochecking Savings See instructions. d Account number 22 Amount of line 20 you want applied to your 2020 estimated tax. .. 22 Amount 23 Amount you owe. Subtract line 19 from line 16. For details on how to pay, see instructions 23 You Owe 24 Estimated tax penalty (see instructions) 24 Third Party Do you want to allow another person (other than your paid preparer) to discuss this return with the IRS? See instructions. Yes. Complete below. Designee No (Other than Designee's Phone Personal identification paid preparer) name no. . number (PIN) Sign 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. Here Your signature Date Your occupation If the IRS sent you an Identity Protection PIN, enter it here Joint return? (see inst.) See instructions. Spouse's signature. If a joint return, both must sign. Date Spouse's occupation If the IRS sent your spouse an Keep a copy for Identity Protection PIN, enter it here your records. (see inst.) Date PTIN Phone no. Email address Preparer's name Preparer's signature Paid Preparer Firm's name Use Only Firm's address Go www.irs.gov/Form1040 for instructions and the latest information. Check if: 3rd Party Designee Self-employed Phone no. Firm's EIN Form 1040 (2019)