Prepare a Form 1040 (pages 1 and 2). Statement of Facts Taxpayer Jane Doe has the following personal information: Name: John Done (age 45) and Jane Doe (age 43) John SSN: 444-44-4444 and Jane SSN: 555-55-5555 Address: 555 Any Street, Anytown, CA 90000
Prepare a Form 1040 (pages 1 and 2).
Statement of Facts
Taxpayer Jane Doe has the following personal information:
Name: John Done (age 45) and Jane Doe (age 43)
John SSN: 444-44-4444 and Jane SSN: 555-55-5555
Address: 555 Any Street, Anytown, CA 90000
Marital Status: Married
Minor Children: 0
Summary:
John and Jane Doe (Mr. & Ms. DOE) have been married since 2013 and have filed jointly every year and have always claimed the standard deduction. Mr. DOE is a nurse at a local hospital and Ms. DOE is a self-employed journalist. Mr. DOE received a W-2 detailing his wages and other employee benefits (details below). Ms. DOE's computes her financial activity from journalism using the cash method accounting (details below).
In addition to their earned income, Mr. & Ms. DOE also have the following other sources of income and expenses:
Interest income from banks: $1,000
Municipal Bond Interest: $3,000
Ordinary Dividends: $500
IRA distribution (rolled-over): $15,000
Gift from Mr. DOE's cousin: $4,000
Short term
Long term capital loss from stock: ($9,000)
Gross Annuity Income: $12,000
State income tax refund: $2,000
Gambling Winnings: $5,000
Gambling Losses: $6,000
Charitable Cash Gifts: $500
2021 IRA Contribution: $12,000
Mortgage Interest on Form 1098: $8,000 (Personal Residence)
Property Taxes: $2,000 (Personal Residence)
Medical Expenses: $1,000 (not premiums)
Sale of Old Computer: $500 ($0.00 adjusted basis / fully
With regard to Mr. DOE's job as a nurse, Mr. DOE receives an annual salary of $70,000. Mr. DOE's employer withheld: 1) $12,000 of federal income taxes; 2) $3,500 of state income taxes; and 3) all required amount of Social Security and Medicare taxes. In addition to his salary, Mr. DOE received the following employee benefits:
- Employer paid health insurance premiums of $14,000; and
- Employer paid group term life insurance with $50,000 in coverage.
With regard to Mr. & Ms. DOE's annuity, they received $1,000 per month in 2021. Mr. & Ms. DOE purchased the 10 year fixed term annuity contact 10 years ago for $36,000. 2021 was the first year Mr. & Ms. DOE received payments under the annuity contract. Mr. & Ms. DOE received all annuity payments in 2021.
In 2021, Ms. DOE had the following financial activity as a self-employed journalist:
- Payments received/earned from customers: $80,000
- Self-employed expenses and payments made related to her journalism income:
- $6,000 of office rent;
- $2,000 for new office equipment;
- $1,000 in accounting and legal fees;
- $4,000 in travel costs;
- $2,000 in non-travel meals;
- $500 in dues and subscriptions
- $4,000 in state income taxes.
- $13,000 in federal estimated payments
For simplicity purposes, please ignore / disregard: 1) the calculation and deduction of QBI; and 2) Line 30 on Form 1040. If Mr. & Ms. DOE receive a refund, they would like the refund applied to their 2022 taxes. Leave all lines after line 38 blank.
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