The requirements for this assignment are to prepare a U. S. Individual Income Tax Return as well as your home state individual income tax return for John and Jane Doe for 2021 using 2020 tax forms if 2021 tax forms are not available.

The following data is to be used in preparing both tax returns. John and Jane Doe are the parents of Jack and Jill who lived with them throughout the year. They also support Jane's mother, Ernestine Day. The following data applies to the above individuals: John P. Doe 45 123-45-6789 Jane E. Doe 46 234-56-7891 Jill H. Doe 21 345-67-8910 Jack B. Doe 16 345-68-9712 Earnestine S. Day 67 456-78-9012

The Does live at 248 Elmhurst Drive, Anywhere, PA 17001-1234. They own their own home, which they purchased in 1999. They refinanced the original mortage on July 1 of this year. Mrs. Day lives at 1246 Independent Way, Anywhere, PA 17001-9876. John and Jane Doe are both employed full time. John changed jobs during the year, and rolled the balance in his former employer's 401(k) plan into his new employer's 401(k) plan. Jill and Jack are both full-time students and had summer jobs. Mrs. Day is not employed and her only income was $3,215 in interest, dividends, and Social Security benefits. You have been given the following documents reporting financial information for the Does: Forms W-2: For John P. Doe from Ajax Corporation For John P. Doe from Acme Corporation For Jane E. Doe from Roadrunner Corporation For Jill H. Doe from Wiley Company For Jack B. Doe from Summertime LLC Forms 1098-MIS From ABC Mortgage Company - Mortgage From DAS Bank - Mortgage From DAS Bank - Home Equity Loan Form 1098-T from Kutzown University of Pennsylvania Form 1099-B from Merrill Lynch Pierce Fenner & Bean Forms 1099-DIV For John P. Doe from Bank of America Corporation For Jane E. Doe from Bank of America Corporation For Jill H. Doe from Bank of America Corporation For Jack B. Doe from Bank of America Corporation Form 1099-G from the Commonwealth of Pennsylvania Forms 1099-INT For John P. Doe from Bank of America Corporation For Jane E. Doe from Bank of America Corporation For Jill H. Doe from Bank of America Corporation For Jack B. Doe from Bank of America Corporation Form 1099-R from Ajax Corporation 401(k) Plan Schedule K-1 from Estate of Richard M. Doe

JOHN and JANE JILL JACK In addition, the John and Jane indicated the following activity during the year: Estimated Payments for state Personal Income Tax 400.00 (4 - $100 timely-made quarterly payments) Real Estate Taxes Paid 7,486.57 Total Unreimbursed Medical Expenses 1,897.00 Total Medical Expenses for Mrs. Day 8,790.00 Long Term Care Insurance Premiums for John and Jane 4,187.00 Contributions with Receipts: Cash to church 4,500.00 104.00 104.00 Cash to United Way 520.00 Cash to American Heart Association 50.00 Cash to American Cancer Society 50.00 Cash to Anywhere Volunteer Fire Co. 50.00 Clothing to Goodwill on May 17 Cost 7,500.00 Thrift Shop Value 1,400.00 Contributions without Receipts: Cash to church 520.00 Cash to Salvation Army 20.00 Investment Interest 147.00 Supplies for Jane's classroom (Grade 10) 267.00 Costs related to John's obtaining the new job 378.40 Safe Deposit Box Rental 42.00 Investment Publications 387.00 Investment Custodian Fees 160.00 Tax Return Preparation Fee 450.00 Other payments to Kutztown University for Jill included (John and Jane Doe made all of the payments to Kutztown University) Room and Board 10,800.00 Books 2,135.00 Economic Impact Payments: January 2021 - John 450.00 Jane 450.00 March 2021 - John 1,050.00 Jane 1,050.00 In response to your questions, John and Jane indicated that when they refinanced their mortgage they borrowed an additional $35,000, which was used for home improvements, The home equity loan was also used to fund improvements to their home.

John and Jane also indicated that they wanted to maximize their contributions to their Individual Retirement Accounts for the year. What can they do?