REQUIREMENT
You are a paid preparer of tax returns.
As paid preparer, you must sign and date the return and give your PTIN number
Your PTIN number is 666.
Prepare a 2018 individual tax return for Peter Paul Jones and Amy Aviana Jones
Compute their 2018 federal income tax liability.
Use the following forms
• Form 1040,
• Schedule A (Form 1040)
• Schedule B (Form 1040) and
• Form 8283.
IRS forms can be found at http://www.irs.gov
The project is due at the beginning of class on the date shown in the syllabus.
The tax return should be accompanied by a transmittal letter. A sample transmittal letter can be found on D2l.
FACTS
This is information relates to Peter and Amy Jones for 2018. Peter (age 39) and Amy (age 37) are married and have 3 children, Olivia (a girl), Jacob and James (boys). They live at 3771 Apollo Road, West Linn OR 97068.
Peter is a lawyer who works for a law firm. Amy works part time in a genetic research lab.
The Jones’ Social Security numbers and ages are as follows:
Peter 111-11-1111 39
Amy 222-22-2222 37
Olivia 333-33-3333 6
Jacob 444-44-4444 4
James 555-55-5555 2
Receipts
Peter’s salary $70,000
Amy’s salary 32,000
Municipal bond interest 2,400
Interest on C.D.’s at Universal Savings 3,100
Dividend on GM stock 1,600 (a qualified dividend)
Expenditures
Eye exam and eyeglasses for Olivia 600
Orthodontic work to correct Jacob’s congenital defect 2,500
Medical insurance premiums (paid on an after-tax basis) 1,800
State withholding for income tax 7,200
Federal withholding for income tax 7,800
State income taxes paid with last year’s return 500
Property tax on home 1,100
Ad valorem Property tax on automobile 300
Home mortgage interest 9,700
Interest on credit cards 200
Cash contribution to church 3,900
Charitable donation of stock
On September 17, Peter and May donated 10 shares of Beta Trade Inc. stock to Clackamas Community College. Beta Trader, Inc. is publicly traded. Peter and Amy had purchased the 10 shares on November 7, 2003 for $300. On the date of donation, the 10 shares had a fair market value of $700.
Miscellaneous
The taxpayers did not make any contributions to an IRA.
The taxpayers did not incur any child dependency costs in order for Amy to work.
The taxpayers did not have signature authority over a foreign bank account.
The taxpayers did not receive a distribution from a foreign trust.
CAUTION
• You will need to save each IRS form on your computer or your work may be lost.
• You will need to use (1) the Qualified Dividends and Capital Gain Tax Worksheet that is contained in the instructions to Form 1040 and (2) the tax rate tables.
• You do not need to submit instructions or the Qualified Dividends and Capital Gain Tax Worksheet.
