Question

Your client, Gwendolyn R. Nichols, SSN: 113-33-3333, DOB: 05-01-1941, attends her annual appointment with you to discuss the filing of her 2018 Federal Income Tax return. Gwendolyn is a widow, her husband, Harold T. Nichols, SSN: 144-44-4444, DOB: 05-13-1939, died on December 11, 2017 of natural causes. She tells you that she paid $11,000 in funeral expenses in January of 2018. Gwendolyn cares for two of her great-grandchildren, Jordan A. Lancaster, SSN: 115-55-5555, DOB: 12-15-2009 and Rose G. Lancaster, SSN: 116-66-6666, DOB: 08-03-2013. Her great-grandchildren live with her full-time. Gwendolyn’s grand-daughter, Therese Lancaster, SSN: 117-77-7777, DOB 03-15-1990, the mother of Gwendolyn’s great-grandchildren, lived with Gwendolyn from May of 2017 through January of 2019. She had a few off and on jobs, Gwendolyn isn’t sure how much she made from work, but says that it wasn’t very much because she wasn’t employed most of the time she lived with her. Gwendolyn tells you that she decreased her hours as a clerk at the library this year and that now she only works about 10 hours each week. She has a W-2 from the library reporting $12,500 in wages. She receives social security benefits of $1,000 per month and she still receives about $10,000 each year in tax-exempt interest. She also receives $750.00 per month from her late husband’s pension. She has provided you with all of the supporting tax documents for these items of income. She owns the residence at 123 West Kansas Street, Pittsburg, Kansas 66762 and has a small mortgage on the property which she took out several years ago to pay for a new roof. She paid real estate property tax on her home of $750. She also owns a 2010 Buick LeSabre and she provides you with a copy of the property tax statement. Gwendolyn is on Medicare and most of her medical expenses are paid. However, she advises you that she paid a total of $1,000 in medical services for various doctor’s appointments, eye glasses and prescriptions for herself. Jordan and Rose have Kansas HealthWave insurance which costs Gwendolyn $100 dollars a month. She also had $500 in additional health care costs for her great-grandchildren. Gwendolyn is an active member of her local Christian church and she donated $500 to the church in the form of cash charitable contributions and she made them a quilt which she donated for a fund-raising raffle. The quilt cost her about $200 for materials and she estimates its value at $600. Gwendolyn provides you the following documents related to her 2018 tax return: W-2 from the Pittsburg Community Library 1099 SSA Social Security Statement 1099-INT from Security Investments, Inc. 1099-R from the Fireman’s Pension fund 2018 Real Estate Property Tax Receipt 2018 Personal Property Tax Receipt Charitable contributions statements 1099-G regarding State of Kansas Tax Refund for 2017 1098 Mortgage Interest Statement Tax Bill for preparation of 2017 taxes, paid Gwendolyn requests that you complete her 2018 federal income tax return. For purposes of this assignment you may assume that all persons are covered by insurance for the entire year. You do not need to complete a state income tax return. You also do not need to concern yourself with any child tax credits. Please complete all attached forms and show how you calculated tax. In addition to completing his tax return, please also answer the following questions:

3. Should she file with a standard or itemized deductions, why?

Answer 1

Sorry due to techinal error unable to load correct answer, I will upload correct today. Please wait. Sorry of that.