Question

The Clarks made quarterly Federal income tax payments of $2,400 on each of the following dates: April 17, 2017; June 15, 2017; September 15, 2017; and January 16, 2018. Last year’s Federal income tax return reflected an overpayment of $800, which the Clarks chose to apply to their 2017 income tax liability. The trustee of Andy’s retirement plan also withheld $6,500 of tax with respect to his retirement withdrawals for the year. Neither Andy nor Sarah holds any foreign financial accounts. Relevant Social Security numbers are noted below:

Name Social Security Number Birth Date

Andrew S. Clark 123-45-6785 09/15/1946

Sarah K. Clark 123-45-6786 12/03/1951

Gabrielle Sparks 123-45-6784 10/19/1984

Malone Sparks 123-45-6787 06/25/2011

Macie Sparks 123-45-6788 06/25/2011

Requiremnts: Make necessary assumptions for information not given in the problem but needed to complete the return. • The Clarks are employing the same tax return preparer who completed their tax return for the prior year. • The taxpayers have substantiation (e.g., records, receipts) to support all transactions for the year. • If a refund is due, the Clarks want it applied to next year’s tax liability. • The Clarks do not want to contribute to the Presidential Election Campaign Fund.

Answer 1

ASSUMPTIONS FOR THE INFORMATION NOT GIVEN

1. Income tax Slabs and Rates for Federal income tax Payments.

2. Whereabouts of Andy and Sarah regarding their respective dates and tax payments procedures.

3. Particulars about Sarah,s account and tax Payments.

OTHER REQUIREMENTS

1. If the Clarks are employing the same tax return preparer who completed their tax return for the prior year, he would state that there has been an over payment of $800 and would seek to either get it transferred for the coming Financial Year or ask for its refund.
2. If the taxpayers have substantiation (e.g., records, receipts) to support all transactions for the year, their tax payer would attach them at their respective places while filing the returns.
3. If a refund is due, the Clarks want it applied to next year’s tax liability *refer point 1*.
4. If the Clarks do not want to contribute to the Presidential Election Campaign Fund, they are free not to do so, its completely their own choice.