Tax Return-Individual Number Four (after Chapter 8) Instructions: Please complete the 2018 federal income tax return for Magdalena Schmitz. Ignore the requirement to attach the form(s) W-2 to the...

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Tax Return-Individual Number Four (after Chapter 8)



Instructions:



Please complete the 2018 federal income tax return for Magdalena Schmitz. Ignore the requirement to attach the form(s) W-2 to the front page of the Form 1040. If required information is missing, use reasonable assumptions to fill in the gaps.



Magdalena Schmitz has undergone some major changes in her life recently. In 2016, at the age of 46, her husband, Roger, passed away. Magdalena has not remarried as of the end of 2018. Magdalena currently lives in Bedford, Pennsylvania. She was living in Pittsburgh when her husband passed away but she moved back to her childhood home so she could get help from her family raising her children. Magdalena was employed in Pittsburgh early in the year but left that job and relocated 100 miles away to pursue a new life and start her new job. Magdalena has three children (ages as of the end of the year): Alyssa (23), Tyler (16), and Connor (11). Magdalena would like to determine her federal income tax under the filing status that is most advantageous for her.



Magdalena reported the following information:



· Magdalena’s social security number is 294-83-2845


· Alyssa’s social security number is 824-84-8456


· Tyler’s social security number is 824-34-9584


· Connor’s social security number is 824-56-2984


· Magdalena’s mailing address is 623 S. Liberty Road Bedford, Pennsylvania 15522



Alyssa is unmarried and a full-time graduate student at Pennsylvania State University (PSU) (EIN 33-9876543). PSU’s address is 1250 Happy Valley, State College, PA 16801. She received her bachelor’s degree the year her father passed away. This year represents her fifth year of full-time higher education schooling. Alyssa works part-time in State College to help with some of her living expenses. Alyssa earned $2,300 in gross income during the year and had her income tax return prepared on campus by Volunteer Income Tax Assistance (VITA) volunteers. Magdalena provided support for Alyssa including paying for rent, books, tuition, food, clothes, medicine, and other support items. In total, Magdalena provided $12,700 of support for the year. PSU provided Alyssa with a Form 1098-T at year end.



Alyssa’s higher education expenses for her university studies were as follows:



Tuition $6,500



Books $2,000







In order to for Magdalena to maintain a full-time job, she sends Connor to a day care program after school five days a week. During the year, Magdalena paid the day care operator $4,250 for Connor’s care.



The day care details are as follows:



Horizon Day Care



452 S. Patriot Road



Bedford, PA 15522



EIN: 43-6598324



Magdalena’s W-2s for the year reported the following:


























Employer




Gross Wages




Federal Income Tax Withholding




State Income Tax Withholding



Juniata Development Corporation



$48,435



$900



$700



Pittsburgh Real Estate



$2,450



$200



$125




Magdalena’s employers withheld all applicable and appropriate payroll taxes. The entire Schmitz family was covered by minimum essential health insurance during each month in 2018. The insurance was provided by Magdalena’s employers.



On January 1, 2017 (prior year), Magdalena started a photography business in which she takes bridal and wedding photographs. She does not do any of the professional printing. However, she provides all the digital files to her clients on a password-protected web site as part of her service. This unique service, along with her skill and reputation, has allowed her to earn additional money on the weekends, primarily in the summer, to help support her daughter in college. Magdalena rents all the camera equipment and does not currently own any equipment herself. The photography business uses the cash method of accounting. The business did not have any obligation to file a Form 1099 to any payee during the year. Magdalena reported the following revenue and expenses for her business this year:



Gross Revenue $6,500


Photographic supplies $ 430


Camera rental $1,050


Web site hosting fee $ 200



Magdalena also received the following amounts in 2018:



Life Insurance Payment-Mutual Life (Mother’s passing) $150,000


Cash gift from her father $ 5,000


Interest income-First Bank of Bedford $ 310


Interest income-General Electric Bond $ 3,200


Interest income-Bedford School District Municipal Bond $ 2,500


Interest income-Johnstown Rural Improvement District Bond $ 1,300


PA state income tax refund* $ 325


*Refund was from state tax she paid in 2017. Magdalena deducted all her state taxes as itemized deductions, and received full tax benefit for the deductions, on her 2017 federal tax return.



Magdalena did not own, control or manage any foreign bank accounts, nor was she a grantor or beneficiary of a foreign trust during the tax year.



Magdalena made the following payments during 2018:



Dentist (unreimbursed by insurance) $1,500


Doctors (unreimbursed by insurance) $ 475


Prescriptions (unreimbursed by insurance) $ 255


Real property taxes on residence $ 950


Vehicle registration fee based upon age of vehicle $ 175


Mortgage interest on principal residence (Form 1098 received) $6,845


Contribution to the American Lung Association $ 600


Contribution to the Habitat for Humanity $1,000


Contribution to Methodist Church of PA $3,000


Contribution to Penn State University $ 400


Magdalena wants to contribute to the Presidential Election Campaign Fund. She would like to receive a refund (if any) of any tax she may have overpaid for the year. Her preferred method of receiving the refund is by check.

Answered Same DayMay 09, 2021

Answer To: Tax Return-Individual Number Four (after Chapter 8) Instructions: Please complete the 2018 federal...

Suvrat answered on May 10 2021
152 Votes
Fo
rm 1040 Department of the Treasury—Internal Revenue Service U.S. Individual Income Tax Return 2018 OMB No. 1545-0074 IRS Use Only—Do not write or staple in this space. (99)
Filing status: Single Married filing jointly Married filing separately Head of household Qualifying widow(er)
Your first name and initial Last name Your social security number
Your standard deduction: Someone can claim you as a dependent You were born before January 2, 1954 You are blind
If joint return, spouse's first name and initial Last name Spouse’s social security number
Spouse standard deduction: Someone can claim your spouse as a dependent Spouse was born before January 2, 1954
Spouse is blind Spouse itemizes on a separate return or you were dual-status alien
Home address (number and street). If you have a P.O. box, see instructions. Apt. no.
City, town
or post office, state, and ZIP code. If you have a foreign address, attach Schedule 6.
Full-year health care coverage
or exempt (see inst.)
Presidential Election Campaign
(see inst.) You Spouse
If more than four dependents,
see inst. and ✓ here ▶
Dependents (see instructions): (2) Social security number (3) Relationship to you (4) ✓ if qualifies for (see inst.):
(1) First name Last name Child tax credit Credit for other dependents
Sign
Here
Joint return?
See instructions.
Keep a copy for
your records.
Under penalties of perjury, I declare that I have examined this return and accompanying schedules and statements, and to the best of my knowledge and belief, they are true,
correct, and complete. Declaration of preparer (other than taxpayer) is based on all information of which preparer has any knowledge.
▲ Your signature Date Your occupation If the IRS sent you an Identity Protection
PIN, enter it
here (see inst.)
Spouse’s signature. If a joint return, both must sign. Date Spouse’s occupation If the IRS sent you an Identity Protection
PIN, enter it
here (see inst.)
Paid
Preparer
Use Only
Preparer’s name Preparer’s signature PTIN Firm’s EIN
Firm’s name ▶ Phone no.
Check if:
3rd Party Designee
Self-employed
Firm’s address ▶
For Disclosure, Privacy Act, and Paperwork Reduction Act Notice, see separate instructions. Cat. No. 11320B Form 1040 (2018)
Form 1040 (2018) Page 2
Attach Form(s)
W-2. Also attach
Form(s) W-2G and
1099-R if tax was
withheld.
1 Wages, salaries, tips, etc. Attach Form(s) W-2 . . . . . . . . . . . . . . . . 1
2a Tax-exempt interest . . . 2a b Taxable interest . . . 2b
3a Qualified dividends . . . 3a b Ordinary dividends . . 3b
4a IRAs, pensions, and annuities . 4a b Taxable amount . . . 4b
5a Social security benefits . . 5a b Taxable amount . . . 5b
6 Total income. Add lines 1 through 5. Add any amount from Schedule 1, line 22 . . . . . 6
7

Adjusted gross income. If you have no adjustments to income, enter the amount from line 6; otherwise,
subtract Schedule 1, line 36, from line 6 . . . . . . . . . . . . . . . . . 7Standard
Deduction for—
• Single or married
filing separately,
$12,000
• Married filing
jointly or Qualifying
widow(er),
$24,000
• Head of
household,
$18,000
• If you checked
any box under
Standard
deduction,
see instructions.
8 Standard deduction or itemized deductions (from Schedule A) . . . . . . . . . . . . 8
9 Qualified business income deduction (see instructions) . . . . . . . . . . . . . . 9
10 Taxable income. Subtract lines 8 and 9 from line 7. If zero or less, enter -0- . . . . . . . . 10
11 a Tax (see inst.) (check if any from: 1 Form(s) 8814 2 Form 4972 3
b Add any amount from Schedule 2 and check here . . . . . . . . . . . . ▶
)
11
12 a Child tax credit/credit for other dependents b Add any amount from Schedule 3 and check here ▶ 12
13 Subtract line 12 from line 11. If zero or less, enter -0- . . . . . . . . . . . . . . 13
14 Other taxes. Attach Schedule 4 . . . . . . . . . . . . . . . . . . . . 14
15 Total tax. Add lines 13 and 14 . . . . . . . . . . . . . . . . . . . . 15
16 Federal income tax withheld from Forms W-2 and 1099 . . . . . . . . . . . . . 16
17 Refundable credits: a EIC (see inst.) b Sch. 8812 c Form 8863
Add any amount from Schedule 5 . . . . . . . . . . . . . . 17
18 Add lines 16 and 17. These are your total payments . . . . . . . . . . . . . . 18
Refund
Direct deposit?
See instructions.
19 If line 18 is more than line 15, subtract line 15 from line 18. This is the amount you overpaid . . . . 19
20a Amount of line 19 you want refunded to you. If Form 8888 is attached, check here . . . . ▶ 20a
▶ b Routing number ▶ c Type: Checking Savings
▶ d Account number
21 Amount of line 19 you want applied to your 2019 estimated tax . . ▶ 21
Amount You Owe 22 Amount you owe. Subtract line 18 from line 15. For details on how to pay, see instructions . . . ▶ 22
23 Estimated tax penalty (see instructions) . . . . . . . . ▶ 23
Go to www.irs.gov/Form1040 for instructions and the latest information. Form 1040 (2018)
SCHEDULE 1
(Form 1040)
2018(Rev. January 2020)
Additional Income and Adjustments to Income
Department of the Treasury
Internal Revenue Service
▶ Attach to Form 1040.
▶ Go to www.irs.gov/Form1040 for instructions and the latest information.
OMB No. 1545-0074
Attachment
Sequence No. 01
Name(s) shown on Form 1040 Your social security number
Additional
Income
1–9b Reserved . . . . . . . . . . . . . . . . . . . . . . . . 1–9b
10 Taxable refunds, credits, or offsets of state and local income taxes . . . . . 10
11 Alimony received . . . . . . . . . . . . . . . . . . . . . . 11
12 Business income or (loss). Attach Schedule C or C-EZ . . . . . . . . . 12
13 Capital gain or (loss). Attach Schedule D if required. If not required, check here ▶ 13
14 Other gains or (losses). Attach Form 4797 . . . . . . . . . . . . . . 14
15a Reserved . . . . . . . . . . . . . . . . . . . . . . . . 15b
16a Reserved . . . . . . . . . . . . . . . . . . . . . . . . 16b
17 Rental real estate, royalties, partnerships, S corporations, trusts, etc. Attach Schedule E 17
18 Farm income or (loss). Attach Schedule F . . . . . . . . . . . . . . 18
19 Unemployment compensation . . . . . . . . . . . . . . . . . 19
20a Reserved . . . . . . . . . . . . . . . . . . . . . . . . 20b
21 Other income. List type and amount ▶ 21
22

Combine the amounts in the far right column. If you don’t have any adjustments to
income, enter here and include on Form 1040, line 6. Otherwise, go to line 23 . . 22
Adjustments
to Income
23 Educator expenses . . . . . . . . . . . . 23
24

Certain business expenses of reservists, performing artists,
and fee-basis government officials. Attach Form 2106 . . 24
25 Health savings account deduction. Attach Form 8889 . 25
26

Moving expenses for members of the Armed Forces.
Attach Form 3903 . . . . . . . . . . . . 26
27 Deductible part of self-employment tax. Attach Schedule SE 27
28 Self-employed SEP, SIMPLE, and qualified plans . . 28
29 Self-employed health insurance deduction . . . . 29
30 Penalty on early withdrawal of savings . . . . . . 30
31a Alimony paid b Recipient’s SSN ▶ 31a
32 IRA deduction . . . . . . . . . . . . . . 32
33 Student loan interest deduction . . . . . . . . 33
34 Tuition and fees. Attach Form 8917 . . . . . . . 34
35 Reserved . . . . . . . . . . . . . . . 35
36 Add lines 23 through 35 . . . . . . . . . . . . . . . . . . . 36
For Paperwork Reduction Act Notice, see your tax return instructions. Cat. No. 71479F Schedule 1 (Form 1040) 2018
SCHEDULE 4
(Form 1040)
Department of the Treasury
Internal Revenue Service
Other Taxes
▶ Attach to Form 1040.
▶ Go to www.irs.gov/Form1040 for instructions and the latest information.
OMB No. 1545-0074
2018
Attachment
Sequence No. 04
Name(s) shown on Form 1040 Your social security number
Other
Taxes
57 Self-employment tax. Attach Schedule SE . . . . . . . . . . . . 57
58 Unreported social security and Medicare tax from: Form a 4137 b 8919 58
59

Additional tax on IRAs, other qualified retirement plans, and other tax-favored
accounts. Attach Form 5329 if required . . . . . . . . . . . . . 59
60a Household employment taxes. Attach Schedule H . . . . . . . . . . 60a
b Repayment of first-time homebuyer credit from Form 5405. Attach Form 5405 if
required . . . . . . . . . . . . . . . . . . . . . . . . 60b
61...
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