1. Determine theTaxable Income
for your clients by using the blank components sheet to help you get organized and started and then Complete the attached tax forms or find the forms online (2020 - 1040, Schedule 1, C). Submit completed forms on this link. (25 points available). Please note that partial credit applies. It will be graded on how each individual income or deduction item was treated and placed, not whether just the taxable income is correct.
2. Deliver your tax return to the client -explaining and confiming to the client what is being reported on the tax return. Ask key questions to be sure all income has been reported and that no possible deductions were left untaken. This will be your M5 Tax task - find link in Mondule 5. (15 points available as Tax Task)
Tip to get Started:Work through each letter using the blank Components handout to organize your information.
Income Tax Components Notes – Tax Components Gross Income Adjustments Adjusted Gross Income (AGI) Deductions Taxable Income Tax Rate Income Tax Liability Other Taxes Total Tax Credits Prepayments Taxes Due or (Refund) 2020 Form 1040 Fo rm1040 2020U.S. Individual Income Tax Return Department of the Treasury—Internal Revenue Service (99) OMB No. 1545-0074 IRS Use Only—Do not write or staple in this space. Filing Status Check only one box. Single Married filing jointly Married filing separately (MFS) Head of household (HOH) Qualifying widow(er) (QW) If you checked the MFS box, enter the name of your spouse. If you checked the HOH or QW box, enter the child’s name if the qualifying person is 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. City, town, or post office. If you have a foreign address, also complete spaces below. State ZIP code Foreign country name Foreign province/state/county Foreign postal code Presidential Election Campaign Check here if you, or your spouse if filing jointly, want $3 to go to this fund. Checking a box below will not change your tax or refund. You Spouse At any time during 2020, did you receive, sell, send, exchange, or otherwise acquire any financial interest in any virtual currency? Yes No Standard Deduction Someone can claim: You as a dependent Your spouse as a dependent Spouse itemizes on a separate return or you were a dual-status alien Age/Blindness You: Were born before January 2, 1956 Are blind Spouse: Was born before January 2, 1956 Is blind Dependents (see instructions): If more than four dependents, see instructions and check here ▶ (2) Social security number (3) Relationship to you (4) ✔ if qualifies for (see instructions): (1) First name Last name Child tax credit Credit for other dependents 1 Wages, salaries, tips, etc. Attach Form(s) W-2 . . . . . . . . . . . . . . . . 1 Attach Sch. B if required. 2a Tax-exempt interest . . . 2a b Taxable interest . . . . . 2b 3a Qualified dividends . . . 3a b Ordinary dividends . . . . . 3b 4a IRA distributions . . . . 4a b Taxable amount . . . . . . 4b 5a Pensions and annuities . . 5a b Taxable amount . . . . . . 5b 6a Social security benefits . . 6a b Taxable amount . . . . . . 6b 7 Capital gain or (loss). Attach Schedule D if required. If not required, check here . . . . ▶ 7 8 Other income from Schedule 1, line 9 . . . . . . . . . . . . . . . . . . . 8 9 Add lines 1, 2b, 3b, 4b, 5b, 6b, 7, and 8. This is your total income . . . . . . . . . ▶ 9 10 Adjustments to income: a From Schedule 1, line 22 . . . . . . . . . . . . . . 10a b Charitable contributions if you take the standard deduction. See instructions 10b c Add lines 10a and 10b. These are your total adjustments to income . . . . . . . . ▶ 10c 11 Subtract line 10c from line 9. This is your adjusted gross income . . . . . . . . . ▶ 11 12 Standard deduction or itemized deductions (from Schedule A) . . . . . . . . . . Standard Deduction for— • Single or Married filing separately, $12,400 • Married filing jointly or Qualifying widow(er), $24,800 • Head of household, $18,650 • If you checked any box under Standard Deduction, see instructions. 12 13 Qualified business income deduction. Attach Form 8995 or Form 8995-A . . . . . . . . 13 14 Add lines 12 and 13 . . . . . . . . . . . . . . . . . . . . . . . . 14 15 Taxable income. Subtract line 14 from line 11. If zero or less, enter -0- . . . . . . . . . 15 For Disclosure, Privacy Act, and Paperwork Reduction Act Notice, see separate instructions. Cat. No. 11320B Form 1040 (2020) Form 1040 (2020) Page 2 16 Tax (see instructions). Check if any from Form(s): 1 8814 2 4972 3 . . 16 17 Amount from Schedule 2, line 3 . . . . . . . . . . . . . . . . . . . . 17 18 Add lines 16 and 17 . . . . . . . . . . . . . . . . . . . . . . . . 18 19 Child tax credit or credit for other dependents . . . . . . . . . . . . . . . . 19 20 Amount from Schedule 3, line 7 . . . . . . . . . . . . . . . . . . . . 20 21 Add lines 19 and 20 . . . . . . . . . . . . . . . . . . . . . . . . 21 22 Subtract line 21 from line 18. If zero or less, enter -0- . . . . . . . . . . . . . . 22 23 Other taxes, including self-employment tax, from Schedule 2, line 10 . . . . . . . . . 23 24 Add lines 22 and 23. This is your total tax . . . . . . . . . . . . . . . . ▶ 24 25 Federal income tax withheld from: a Form(s) W-2 . . . . . . . . . . . . . . . . . . 25a b Form(s) 1099 . . . . . . . . . . . . . . . . . . 25b c Other forms (see instructions) . . . . . . . . . . . . . 25c d Add lines 25a through 25c . . . . . . . . . . . . . . . . . . . . . . 25d 26 2020 estimated tax payments and amount applied from 2019 return . . . . . . . . . . 26 27 Earned income credit (EIC) . . . . . . . . . . . . . . • If you have a qualifying child, attach Sch. EIC. • If you have nontaxable combat pay, see instructions. 27 28 Additional child tax credit. Attach Schedule 8812 . . . . . . . 28 29 American opportunity credit from Form 8863, line 8 . . . . . . . 29 30 Recovery rebate credit. See instructions . . . . . . . . . . 30 31 Amount from Schedule 3, line 13 . . . . . . . . . . . . 31 32 Add lines 27 through 31. These are your total other payments and refundable credits . . . ▶ 32 33 Add lines 25d, 26, and 32. These are your total payments . . . . . . . . . . . ▶ 33 Refund 34 If line 33 is more than line 24, subtract line 24 from line 33. This is the amount you overpaid .