Question

Mark Huang is single, graduated from college in 2015 and began work as a systems analyst in July of that year. He is preparing to file his income tax return for 2015 and has collected the financial information shown below for the calendar year.

Scholarship used to pay tuition $5750

Scholarship used to pay room and board $1850

Salary $30250

Interest income $185

Itemized deductions $3000

Income taxes withheld $2600

a. Prepare marks 2015 tax return, using a $6,300 standard deduction, a personal exemption of $4000, and the tax rates. Which tax rate should mark use, and why? (You may obtain tax forms on the IRS website WWW.irs.gov. Either leave blank or makeup information on a sheet that is not provided in this problem.

b. Prepare marks 2015 tax return using the data in part A along with the following information.

IRA contribution $5000

Cash dividends received $150

Which tax form would you use and why?

HELP PLZZZ My professor just gave us a tax form sheet and wanted us to fill it in based on this problem and I really am stuck! A sheet showing me where everything goes would be the greatest thing in the world!

GOD BLESS

Answer 1

For part A, Form no 1040-EZ can be used which is more simplest form for individual return. However, 1040 can be also used for the same. 1040A need to be used for part B since due to claiming IRA contribution and cash dividend. Since 1040A can be used in both option, the calculation and form is used for this problem. The 1040 A attached is completed along-with part B information, the information for part B can be removed in attached form 1040A for deriving part A only. The calculation for part A is provided in the appended table.

For Tax rate, single individual tax rate for 2015 is used. The calculation is shown as below:-

Form No 1040 A		Option B			Option A
Line Number	Particulars	Amount ($)			Amount ($)
	salary	$      30,250			$ 30,250
	Scholarship for Tution Fee	$                  -	Tax Free		$             -
	Scolarship for Board & Room	$         1,850			$    1,850
7	Wages, Salaries, Tips	$      32,100			$ 32,100
8a	Taxable Interest	$            185			$        185
9a	Ordinary Dividend	$            150			$             -
15	Total Income	$      32,435			$ 32,285
17	IRA Deduction	-$        5,000			$             -
21 & 22	Adjusted Gross Income	$      27,435			$ 32,285
24	Standard Deduction	-$        6,300			-$    6,300
25		$      21,135			$ 25,985
26	Personal Exemption	-$        4,000			-$    4,000
27	Taxable Income	$      17,135			$ 21,985
	Tax(Table 1)	$         2,109			$    2,836
Tution fee is not considered for deduction since paid out of scholarship
Tax Rate	Singe
0-$9,225	10%	$            923
$9,226-$37,450	15%	$         4,234
Table 1		Option A			Option B
0-$9,225	10%	$            923			$        923
$9,226 - $17,135	15%	$         1,186	$9226-$21985		$    1,914
	Total	$         2,109			$    2,836