Based on the information provided, you are to complete the 2013


Question Description:

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Based on the information provided, you are to complete the 2013 Form 1040 and any supporting schedules/forms for Bob and Melissa Grant. You do not need to prepare a state tax return. You should complete this tax return by hand using the forms available from the IRS website, www.irs.gov. You can use Adobe (or similar program) to type your responses on the forms. You may not use tax return preparation software to assist in preparing the forms. You may find the form instructions helpful in completing this assignment. Please provide a list of assumptions you make, if any. I will grade your return subject to any reasonable assumptions listed. You do not need to calculate AMT. 1040 Project Instructions (1).docx Bob and Melissa Grant are married and live in Lexington, Kentucky. The Grants have two children Jared age 15 and Alese age 12. The Grants would like to file a joint tax return for the year. The following information relates to the Grant’s tax year: Bob’s Social Security number is 987-45-1234 Melissa’s Social Security number is 494-37-4883 Jared’s Social Security number is 412-32-5690 Alese’s Social Security number is 412-32-6940 The Grants’ mailing address is 95 Hickory Road, Lexington, Kentucky 40502. Jared and Alese are tax dependents for federal tax purposes. Bob Grant received the following during the year: Employer National Storage Lexington Little League Gross Wages $68,200 $3,700 Federal Income Tax Withholding $8,100 0 State Income Tax Withholding $3,500 0 Melissa Grant received the following during the year: Employer Gross Wages Jensen Photography $23,600 Federal Income Tax Withholding $2,450 State Income Tax Withholding $1,225 All applicable and appropriate payroll taxes were withheld by Grants’ respective employers. The Grants also received the following during the year: Interest Income from First Kentucky Bank Interest Income from City of Lexington, KY Bond Interest Income from U.S. Treasury Bond Interest Income from Nevada State School Board Bond Workers’ Compensation payments to Bob $150 $450 $700 $125 $4,350 Disability payments received by Bob on account of injury $3,500 National Storage paid 50% of the premiums on the policy and included the premium payments in Bob’s taxable wages. Bob paid the remaining 50% of the premium payments. Receipt of payment by Melissa as a result of a lawsuit for damages sustained in a car accident: Medical Expenses $2,500 Emotional Distress $12,000 Punitive Damages Total $10,000 $24,500 Eight years ago, Melissa purchased an annuity contract for $88,000. This year, she received her first payment on the annuity. The payment amount was $15,000. The annuity started to pay on January 1 and she received a full first year’s payment. It will pay her $15,000 per year for ten years (beginning with this year). The $15,000 payment was reported to Melissa a form 1099-R for the current year (box 7 contained an entry of “7” on the form). The Grants did not own, control or manage any foreign bank accounts nor were they a grantor or beneficiary of a foreign trust during the tax year. The Grants paid or incurred the following expenses during the year: Dentist/Orthodontist (unreimbursed by insurance) $8,500 Doctors (unreimbursed by insurance) $ 625 Prescriptions (unreimbursed by insurance) $ 380 KY state tax payment made on 4/15/13 for 2012 liability $1,350 Real property taxes on residence $1,800 Vehicle property tax based upon age of vehicle $250 Mortgage interest on principal residence $8,560 Interest paid on borrowed money to purchase the City of Lexington, KY municipal bonds $400 Interest paid on borrowed money to purchase U.S. Treasury bonds $240 Contribution to the Red Cross $1,000 Contribution to Senator Rick Hartley’s Re-election Campaign $2,500 Contribution to First Baptist Church of Kentucky $6,000 Fee paid to Jones & Company, CPAs for tax preparation $200 In addition, Bob drove 6,750 miles commuting to work and Melissa drove 8,230 miles commuting t

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