Question

Tax Return #1 Edward and Erin Ericson

Use the following information to complete Edward and Erin Ericson’s 2017 federal income tax return. If information is missing, use reasonable assumptions to fill in the gaps.

You may need the following forms and schedules to complete the project: Form 1040, Schedule A, Schedule B, Schedule C, Schedule D, etc. The forms, schedules, and instructions can be found at the IRS Web site (www.irs.gov). The instructions can be helpful in completing forms.

Edward and Erin Ericson are married and have two dependent children, Curtis and Cathy. Curtis is currently in school full time at UTEP. The Ericson’s also support Edward’s dad, Adam who lives across town in an apartment. Adam earns $3,500 a year from Social Security and Edward pays for the rest of Adam’s bills (food, rent, etc) for $2,000 per month. Edward works as a design planner for the Santa Fe Design Co. Erin was injured earlier in the year at work and was given Worker’s Compensation. She decided to quit working and now works as a volunteer at the Animal Shelter. Erin was given $975 in tips for dog walking. Erin also won an award for best Halloween costume for her and her pet poodle for $6,000 that she used to pay for night classes for training to be a dog groomer. Edward and Erin own a home and pay interest on their home loan (balance of $289,000) and a personal loan to pay for Curtis’ tuition at school (balance of $11,000). Edward and Erin plan to file as married filing jointly. Based on their information below, prepare Edward and Erin’s 2017 Federal tax return. Also assume Curtis is ineligible for the American Opportunity Education Credit and the Lifetime Learning Credit.

The Ericson’s do not want to contribute to the presidential election campaign.

The Ericson’s live at 722 Franklin Ave, El Paso, TX 79939

Edward’s birthday is 3/5/1975 and his Social Security number is 229-19-8334

Erin’s birthday is 1/2/1977 and her Social Security number is 265-30-0877

Curtis’ birthday is 12/16/1997 and his Social Security number is 243-18-0298

Cathy’s birthday is 6/8/2008 and her Social Security number is 243-90-1432

Adam Ericson’s birthday is 7/20/1948 and his Social Security # is 221-21-3362

The Ericson’s do not have any foreign bank accounts or trusts

All of the Ericson’s were covered with Health Insurance for the entire year

Cathy is eligible for the Child Tax Credit of $1,000

The Ericson’s have summarized the income and expenses they expect to report this year as follows:

Income

Edward’s salary $ 72,500

Erin’s Worker’s Compensation Income 9,750

Interest from certificate of deposit at Wells Fargo Bank 1,800

Ordinary Dividend income on GE Stock 1,600

Interest from municipal bond funds 620

Expenditures:

Federal income tax withheld from Edward’s wages $ 6,720

State income tax withheld from Edward’s wages 1,852

Social Security tax withheld from Edward’s wages 4,495

Medicare taxes withheld from Edward’s wages 1,051

Real estate taxes paid on residence 6,962

Automobile licenses (based on weight) 410

Home mortgage interest paid 10,320

Interest paid on Discover Credit Card 2,200

Medical Expenses (unreimbursed) 2,451

Edward’s employee travel expenses (unreimbursed) 1,998

Tax Preparation fees 350

Cash contributions to Governor’s election campaign 700

Cash contributions to the Rescue Mission 900

Interest paid on loans for Curtis’ tuition 1,200

Curtis' room and board at school 8,110

Curtis’ tuition at school 17,500

Please answer by filling out a Form1040 and comparing with the description above:

Answer 1