Question

Demarco and Janine Jackson have been married for 20 years and have four children who qualify as their dependents (Damarcus, Janine, Michael, and Candice). The couple received salary income of $187,000, qualified business income of $20,500 from an investment in a partnership, and they sold their home this year. They initially purchased the home three years ago for $252,500 and they sold it for $302,500. The gain on the sale qualified for the exclusion from the sale of a principal residence. The Jacksons incurred $18,600 of itemized deductions, and they had $4,600 withheld from their paychecks for federal taxes. They are also allowed to claim a child tax credit for each of their children. However, because Candice is 18 years of age, the Jacksons may claim a child tax credit for other qualifying dependents for Candice. (Use the tax rate schedules.)

Download the Tax Form and enter the required values in the appropriate fields. Complete the first two pages of the Jackson's Form 1040 ( use the most recent from available).

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1040 Department of the Treasury—Internal Revenue Service (99) U.S. Individual Income Tax Return 2017 OMB No. 1545-0074 IRS Use Only—Do not write or staple in this space. For the year Jan. 1–Dec. 31, 2017, or other tax year beginning , 2017, ending , 20 See separate instructions. Your first name and initial Last name Your social security number
If a joint return, spouse’s first name and initial Last name Spouse’s social security number
▲ Make sure the SSN(s) above and on line 6c are correct.
Home address (number and street). If you have a P.O. box, see instructions. Apt. no.
City, town or post office, state, and ZIP code. If you have a foreign address, also complete spaces below (see instructions).
Foreign country name                                        Foreign province/state/county                        Foreign postal code  
Presidential Election Campaign Check here if you, or your spouse if filing jointly, want $3 to go to this fund. Checking a box below will not change your tax or refund. You Spouse
Filing Status
Check only one box.
1 Single 2 Married filing jointly (even if only one had income) 3 Married filing separately. Enter spouse’s SSN above and full name here. ▶
4 Head of household (with qualifying person). (See instructions.) If the qualifying person is a child but not your dependent, enter this child’s name here. ▶ 5 Qualifying widow(er) (see instructions) Exemptions 6a Yourself. If someone can claim you as a dependent, do not check box 6a . . . . . b Spouse . . . . . . . . . . . . . . . . . . . . . . . . } c Dependents: (1) First name                         Last name (2) Dependent’s social security number (3) Dependent’s relationship to you (4) ✓ if child under age 17 qualifying for child tax credit (see instructions)
If more than four dependents, see instructions and check here ▶
d Total number of exemptions claimed . . . . . . . . . . . . . . . . .
Boxes checked on 6a and 6b No. of children on 6c who: • lived with you • did not live with you due to divorce or separation (see instructions) Dependents on 6c not entered above Add numbers on lines above ▶
Income
Attach Form(s) W-2 here. Also attach Forms W-2G and   1099-R if tax was withheld.
If you did not get a W-2,   see instructions.
7 Wages, salaries, tips, etc. Attach Form(s) W-2 . . . . . . . . . . . . 7 8a Taxable interest. Attach Schedule B if required . . . . . . . . . . . . 8a b Tax-exempt interest. Do not include on line 8a . . . 8b 9 a Ordinary dividends. Attach Schedule B if required . . . . . . . . . . . 9a b Qualified dividends . . . . . . . . . . . 9b 10 Taxable refunds, credits, or offsets of state and local income taxes . . . . . . 10 11 Alimony received . . . . . . . . . . . . . . . . . . . . . 11 12 Business income or (loss). Attach Schedule C or C-EZ . . . . . . . . . . 12 13 Capital gain or (loss). Attach Schedule D if required. If not required, check here ▶ 13 14 Other gains or (losses). Attach Form 4797 . . . . . . . . . . . . . . 14 15 a IRA distributions . 15a b Taxable amount . . . 15b 16 a Pensions and annuities 16a b Taxable amount . . . 16b 17 Rental real estate, royalties, partnerships, S corporations, trusts, etc. Attach Schedule E 17 18 Farm income or (loss). Attach Schedule F . . . . . . . . . . . . . . 18 19 Unemployment compensation . . . . . . . . . . . . . . . . . 19 20 a Social security benefits 20a b Taxable amount . . . 20b 21 Other income. List type and amount 21 22 Combine the amounts in the far right column for lines 7 through 21. This is your total income ▶ 22
Adjusted Gross Income
23 Educator expenses . . . . . . . . . . . 23 24 Certain business expenses of reservists, performing artists, and fee-basis government officials. Attach Form 2106 or 2106-EZ 24 25 Health savings account deduction. Attach Form 8889 . 25 26 Moving expenses. Attach Form 3903 . . . . . . 26 27 Deductible part of self-employment tax. Attach Schedule SE . 27 28 Self-employed SEP, SIMPLE, and qualified plans . . 28 29 Self-employed health insurance deduction . . . . 29 30 Penalty on early withdrawal of savings . . . . . . 30 31 a Alimony paid b Recipient’s SSN ▶ 31a 32 IRA deduction . . . . . . . . . . . . . 32 33 Student loan interest deduction . . . . . . . . 33 34 Tuition and fees. Attach Form 8917 . . . . . . 34 35 Domestic production activities deduction. Attach Form 8903 35 36 Add lines 23 through 35 . . . . . . . . . . . . . . . . . . . 36 37 Subtract line 36 from line 22. This is your adjusted gross income . . . . . ▶ 37 For Disclosure, Privacy Act, and Paperwork Reduction Act Notice, see separate instructions. Cat. No. 11320B Form 1040 (2017)

COUSE FEDERAL TAX PROCEDURE

Answer 1

Form

1040

Department of the Treasury––Internal Revenue Service      (99)

2017

U.S. Individual Income Tax Return

OMB No. 1545-0074

IRS Use Only—Do not write or staple in this space.

For the year Jan. 1--Dec. 31, 2017, or other tax year beginning

,2017, ending

See separate instructions.

Your first name and initial

Last name

Your social security number

Demarco

Jackson

If joint return, spouse's name & initial

Last name

Spouse's social security number

Janine

6a

X

Yourself.

If someone can claim you as a dependent, do not check box 6a .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .

Exemptions

b

X

Spouse .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .

c

Dependents:

If more than four

(1) First name

Last name

dependents, see

Damarcus Jackson

instructions and

Janine Jackson

check here.

Michael Jackson

Candice Jackson

Income		7		Wages, salaries, tips, etc. Attach Form(s) W-2													.   .   .   .   .   .   .   .   .								7	187,000
		8	a	Taxable interest. Attach Schedule B if required.   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .																					8a	0
Attach Form(s)			b	Tax-exempt interest. Do not include on line 8a													.   .   .   .   .   .   .   .   .	8b		0
W-2 here. Also		9	a	Ordinary dividends. Attach Schedule B if required.   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .																					9a	0
attach Forms			b	Qualified dividends													.   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .	9b		0
W-2G and		10		Taxable refunds, credits, or offsets of state and local income taxes   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .																					10
1099-R if tax		11		Alimony received															.   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .	.   .   .   .   .   .   .   .					11
was withheld.		12		Business income or (loss). Attach Schedule C or C-EZ.   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .																					12	20,500
		13		Capital gain or (loss). Attach Schedule D if required. If not required, check here.																		####			13	50,000
If you did not		14		Other gains or (losses). Attach Form 4797																				.   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .	14
get a W-2,		15	a	IRA distributions								15a	0					b	Taxable amount					.   .   .   .   .	15b	0
see instructions.		16	a	Pensions and annuities								16a	0					b	Taxable amount					.   .   .   .   .	16b	0
		17		Rental real estate, royalties, partnerships, S corporations, trusts, etc.     Attach Schedule E.																					17	6,750
		18		Farm income or (loss). Attach Schedule F.   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .																					18	0
		19		Unemployment compensation . .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .																					19
		20	a	Social security benefits								20a	0					b	Taxable amount .   .   .   .   .   .   .						20b	0
		21		Other income. List type and amount.																					21	0
		22		Combine the amounts in the far right column for lines 7 through 21.														This is your total income							22	264,250
		23		Educator expenses .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .														23
Adjusted		24		Certain business expenses of reservists, performing artists, and fee-basis government officials. Attach Form 2106 or 2106-EZ														24
Gross		25		Health savings account deduction. Attach Form 8889 .   .   .   .   .   .   .   .   .   .														25		0
Income		26		Moving expenses. Attach Form 3903 .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .										.   .   .   .   .   .   .				26
		27		Deductible part of self-employment tax. Attach Schedule SE .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .														27		0
		28		Self-employed SEP, SIMPLE, and qualified plans .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .														28
		29		Self-employed health insurance deduction													.   .   .   .   .   .   .   .   .   .   .   .	29
		30		Penalty on early withdrawal of savings .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .														30		0
		31	a	Alimony paid							b Recipient's SSN							31a								Enter birthdates
		32		IRA deduction													.   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .	32								in Cell AL11, etc.
		33		Student loan interest deduction						.   .   .   .   .   .   .   .   .   .   .   .   .   .   .								33								(See above.)
		34		Tuition and fees. Attach Form 8917													.   .   .   .   .   .   .   .   .   .   .   .   .   .   .	34
		35		Domestic production activities deduction. Attach Form 8903														35
		36		Add lines 23 through 35											.   .   .   .   .   .   .   .   .   .   .   .   .   .   .										36	0
		37		Subtract line 36 from line 22.									This is your adjusted gross income.										.   .   .   .   .		37	264,250
For Disclosure, Privacy Act, and Paperwork Reduction Act Notice, see separate instructions.																						Cat. No. 11320B							Form 1040
Form 1040 (2017)																													Enter your birthdate and your spouse's birthdates above.
Tax and		38		Amount from line 37 (adjusted gross income)													0	0		0			0		38	264,250

	62		Taxes from: a			Form 8959 b			X	Form 8960 c		Instructions; enter code(s)												62	542
	63		Add lines 56 through 62.					This is your total tax															.   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .	63	542
Payments	64		Federal income tax withheld from Forms W-2 and 1099													.   .   .   .   .   .	64		4,600

	74		Add lines 64, 65, 66a, and 67 through 73.									These are your				total payments						.   .   .   .   .   .   .		74	4,600
Refund	75		If line 74 is more than line 63, subtract line 63 from line 74.													This is the amount you overpaid								75	4,058