Assignment 1: Assisting a Family with their Tax Returns
Imagine that you are preparing taxes for a local
tax service provider. A married couple named Judy and Walter Townson have come
to you to seeking assistance with their federal income taxes. During your
meeting with the Townsons, you gather the following information:
They are both 55 years of age.
They have two daughters and one son. One
daughter (age 25) is married with children. One daughter (age 20) is living at
home and attending college. Their son (age 16) is a junior in high school.
They are currently paying for their
college-student daughter to attend school full time.
Judy is employed as a teacher and makes $60,000
a year. She used $500 of her personal funds to purchase books and other
supplies for her classroom.
Walter is employed as a CPA and makes $100,000 a
year.
They provided you a 1099-INT which reported
$4,500 in interest, of which $500 was savings bond interest.
They provided you a 1099-DIV which reported $300
in dividends.
They received a state tax refund last year of
$385.
They provided you a list of expenses including:
Doctor’s bills, $800
Prescriptions, $400
New glasses, $2,000
Dental bills, $560
Braces, $5,000
Property taxes for their two cars of $800, which
included $50 in decal fees
Real estate taxes of $4,500
Mortgage interest of $12,000
Gifts to charities, $1,000
GoFundMe contribution to local family in need,
$100
Tax preparation fees for last year’s taxes, $400
Consider the most beneficial way for Judy and
Walter to file their federal income tax return. Prepare a brief written summary
that addresses the following:
Estimated taxable income for Judy and Walter
(please show computations).
Summary of tax return, including any suggestions
or tax planning considerations.
Explain how you determined the filing status,
dependents, and use of standard/itemized deduction.
Note: The summary should be no more than 500
words and should be uploaded as a Word document with a cover page via the
Blackboard assignment tab in Week 6.
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