preparing a tax return problem.

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Wnthne444

Business Finance

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Income Tax Practical Tax Problem You are to prepare a tax return for Jeff and Samantha Smith. You need to make up Social Security numbers for them. They have two children, Annette and Sophie. You need to make up Social Security numbers for them. Both Annette and Sophie are in elementary school. Jeff is self-employed as an insurance salesman. Samantha is an elementary school teacher. You are to makeup addresses for their residence and for Jeff’s insurance business. Jeff’s business is on the tax basis and materially participates in the business. All forms can be found at irs.gov “Forms and Publications”. The 1040 will have tax tables for you to complete the return. You will need the following forms; 1040, Schedule A, Schedule B, Schedule C, Schedule D, Schedule E, and Schedule SE. The tax tables should be in the Form 1040 section. If you need a publication to assist in your preparation, then go to “Search” in “Publications.” The following is the information you will need to complete the tax return. Jeff’s Insurance Income Samantha’s School Income Samantha’s Withholding Samantha’s FICA/Medi-Care Samantha’s College Interest Royalty from Consolidated Gas Medical Insurance Doctors Eyeglasses Dentists Mortgage Interest Taxes on Homestead Contributions to Church Samantha’s Union Dues Samantha’s Teacher Expenses Tax Return Preparation Interest on Allied Savings Dividend Income Jeff’s Insurance Expenses Travel Meals Office Supplies Auto Expenses Rent Business Taxes Business Insurance Internet Books Continuing Education 40,000 32,000 4,000 2,400 1,200 700 3,000 2,000 300 200 6,000 3,000 3,000 300 200 100 200 100 400 300 1,000 3,000 4,000 100 400 300 200 500 Jeff’s Insurance’s Expenses Telephone 1,500 Tolls 200 Storage 200 Estimated Tax Payments 6,000 Bank Charges 200 Sale of Diamond Co. Gross Sales 3,000 Basis 2,000 (Assume Long Term) Partnership Income From Smith Family Partnership 1,000
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