Question

Fill in the table below, using the information on this handout, based on what is best for the client. Jake (age 47) and Sally (age 37) are married and have three children, ages 4, 7, and 10. The W2 table is for the 2019 income tax year. Assume tax laws in 2019 are as described in the textbook. They will file as Married Filing a Joint Return. If no information is given about something, assume zero, e.g., zero contributions to an IRA. Line numbers for IRS forms refer to the 2019 forms posted on Carmen.

Wages	1040 Line 1
Other income (1040 Lines 2b-7a) List each non-zero amount with description:
Total income	1040 Line 7b =
D. Adjustments to gross income	1040 Line 8a =
E. 2019 Federal adjusted gross income $ =	1040 Line 8b =
F. Filing status = (single/married filing jointly, household head) (circle 1)
G. Enter standard deduction (SD) $ = H. List and enter total of itemized deductions =	I. 1040 Line 9 = Assume Line 10 = 0 1040 Line 11a =
J. 2019 Federal taxable income $ =	1040 Line 11b =
K. 2019 marginal tax rate (bracket)
L. Income tax before credits for 2019 $= Ignore any taxes other than tax from Schedule Y-1	1040 Line 12b =
M. Nonrefundable portion of child and family tax credit Line 13a = Other nonrefundable credits in Schedule 3     Credit for child care expenses =     Retirement savings credit       = Total                                                                                                                           1040 Line 13b=
Income tax after non-refundable credits		1040 Line 14 = Assume Line 15=0 so Line 16=Line 14
O. Federal income tax withheld for 2019 (W2)$ =		1040 Line 17=
P. Earned income credit =                                                                                                               (make your best estimate, showing your calculations at bottom of page) Q. Additional child tax credit R. American opportunity credit		S. Total other payments and refundable credits 1040 Line 18e =
T. 19. Add Line 17 and Line 18e. These are your total payments		Line 19 =
U. 20. If Line 18 is more than Line 15, subtract Line 16 from Line 19. Amount overpaid.		Line 20 =
V. 23. If Line 18 is less than Line 15, subtract Line 19 from Line 16. Amount you owe.		Line 23 =

Use 2019 tables for all calculations. Mortgage interest payments for home purchase = $4,000. Cash contribution to church = $500. Real estate taxes = $1,200. Medical expenses not covered by insurance = $1,900.

Jake contributed $1,000 to a Roth IRA.

W2 forms	Jake	Sally
Box 1 wages	20,000	$22,000
Box 2 federal income tax withheld in 2019	800	800
Box 17, state income tax withheld in 2019	250	300
Box 19, local income tax withheld in 2019	400	440

Answer 1

Jack and Sally

2019 Tax Return.

Wages 1040 Line 1 $42,000

Other Incomes 1040 (line 2b-7a) 0

Total Income Line 7b 42,000

Adjusted Gross Income Line 8a 0

Federal Adjusted Gross Income Line 8b 42,000

Filing Status - Married Filing Status

Standard Deduction Line 9 24,400

List and Enter Itemized deduction

Medical Expenses $1,900 (allowed zero)

State taxes (250+300) 550

Local taxes (400+440) 840

RE taxes 1,200

Mortgage Interest 4,000

Charity 500

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Total Itemized $7,090

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Line 10 0

2019 Itemized deduction Line 11a 24,400

2019 Federal taxable income Line 11b 17,600

2019 Marginal tax rate - 10%

Income tax before credits Line 12b 1,763

Non-Refundable portion of Child tax and family credit    1,763

Other taxes Line 15 0

Total Tax Line 16 0

Federal Income tax withheld (W-2s) Line 17 1,600

Earned Income Credit 2,933

Additional Child tax credit Line 18e 4,200

Total payments Line 19 8,733

The amount you overpaid Line 20    8,733

The amount you owe Line 23 0