ACCT$413$–$Tax$Return$Assignment$ Beth$Vermeer$8$Fall$2015$ $ Facts:$ ! Bob!(age!40)!and!Susan!(age!37)!are!married!taxpayers!and!they!file!jointly.!!Both! have!excellent!vision.!!They!live!at!42!South!Street,!Philadelphia,!PA!19324!!!Bob’s! social!security!number!is!888J88J9898!and!Susan’s!social!security!number!is!333J 33J3222.!!Neither!Bob!nor!Susan!wishes!for!$3!to!go!to!the!presidential!election! campaign!fund.!! ! Bob!and!Susan!provide!all!of!the!support!for!their!dependent!children!listed!below:! ! Hope! ! daughter! social!security!number!111J11J1111! age:!5! ! ! Joy! ! daughter! social!security!number!222J22J2222! age:!3! ! Bobby!! son! ! social!security!number!333J33J3333! age:!1! ! Bob!and!Susan!also!provide!all!the!support!of!Bob’s!cousin,!Joe,!who!lived!with!them! for!the!last!9!months!of!2014!and!earned!$2,100!from!a!partJtime!job!in!2014.!!Joe!is! 25!years!old!and!his!social!security!number!is!444J44J4444.!!! ! Bob!and!Susan!provide!you!with!the!following!information!about!their!income!for! 2014:! ! • Bob!works!for!Lehigh!Brothers.!!Last!year,!he!earned!taxable!wages!of! $164,000.!!His!WJ2!also!shows!the!following!withholdings!for!the! year:!$22,000!of!federal!income!tax,!$8,700!of!state!income!tax,!$7,254! of!social!security!taxes,!and!$2,378!of!medicare!taxes.!! • Bob!also!worked!a!second!job!with!PartJtime!Plumbers.!!Last!year,!he! earned!taxable!wages!of!$25,000!and!his!WJ2!shows!the!following! withholdings:!$4,500!of!federal!income!tax,!$1,000!state!income!tax,! $1,550!of!social!security!taxes,!and!$363!of!medicare!taxes.!! • Susan!works!partJtime!as!a!lawyer!with!Dewey,!Cheatem!&!Howe.!! Last!year,!she!earned!taxable!wages!of!$92,000!and!her!WJ2!shows! the!following!withholdings:!$12,000!of!federal!income!tax,!$7,000!of! state!income!tax,!$5,704!of!social!security!taxes,!and!$1,334!of! medicare!taxes.! • Both!Bob!and!Susan!are!eligible!for!and!participate!in!a!qualified! retirement!plan!through!their!employers.!! ! ! ! ! ! • Susan!also!consults!partJtime!and!operates!as!a!one!member!LLC! under!the!business!name!Legal! Solution s.!!Her!business!information!is! as!follows:! o Consulting!revenues!! ! ! $43,000! o Professional!malpractice!insurance!! $8,000! o Advertising!expenses! ! ! $1,000! o Supplies!expenses! ! ! ! $5,000! o Meals!and!entertainment!(client!meetings)!$6,000! o Travel!expenses! ! ! ! $!7,000! o Professional!licensing!fees!(paid!to!PA)! $!1,200! o Parking!fines!(paid!to!PA)! ! ! $!750! o Office!expenses! ! ! ! $3,400! o Computer!(placed!in!service!6/15/14)! $4,500! ! She!would!like!to!take!the!maximum!depreciation! allowable!on!this!asset!in!2014! o Cell!phone!(placed!in!service!11/12/14)! $!390! ! Business!use!percentage:!80%! ! She!does!not!want!to!take!Section!179!or!bonus! depreciation!on!this!asset! o SUV!weighing!4,800!pounds!! ! $38,000! ! Placed!in!service!8/10/14! ! Business!use!percentage:!100%! ! She!does!not!want!to!take!Section!179!or!bonus! depreciat.

1. ACCT$413$–$Tax$Return$Assignment$
Beth$Vermeer$8$Fall$2015$
$
Facts:$
!
Bob!(age!40)!and!Susan!(age!37)!are!married!taxpayers!and!th
ey!file!jointly.!!Both!
have!excellent!vision.!!They!live!at!42!South!Street,!Philadelp
hia,!PA!19324!!!Bob’s!
social!security!number!is!888J88J9898!and!Susan’s!social!secu
rity!number!is!333J
33J3222.!!Neither!Bob!nor!Susan!wishes!for!$3!to!go!to!the!pr
esidential!election!
campaign!fund.!!
!
Bob!and!Susan!provide!all!of!the!support!for!their!dependent!c
hildren!listed!below:!
! Hope! ! daughter! social!security!number!111J11J1111!
age:!5! !
! Joy! ! daughter! social!security!number!222J22J2222! age:!3!
! Bobby!! son! ! social!security!number!333J33J3333! age:!1!

2. !
Bob!and!Susan!also!provide!all!the!support!of!Bob’s!cousin,!J
oe,!who!lived!with!them!
for!the!last!9!months!of!2014!and!earned!$2,100!from!a!partJti
me!job!in!2014.!!Joe!is!
25!years!old!and!his!social!security!number!is!444J44J4444.!!!
!
Bob!and!Susan!provide!you!with!the!following!information!ab
out!their!income!for!
2014:!
!
•
Bob!works!for!Lehigh!Brothers.!!Last!year,!he!earned!taxable!
wages!of!
$164,000.!!His!WJ2!also!shows!the!following!withholdings!for
!the!
year:!$22,000!of!federal!income!tax,!$8,700!of!state!income!ta
x,!$7,254!
of!social!security!taxes,!and!$2,378!of!medicare!taxes.!!
•
Bob!also!worked!a!second!job!with!PartJtime!Plumbers.!!Last!
year,!he!
earned!taxable!wages!of!$25,000!and!his!WJ2!shows!the!follo
wing!

3. withholdings:!$4,500!of!federal!income!tax,!$1,000!state!inco
me!tax,!
$1,550!of!social!security!taxes,!and!$363!of!medicare!taxes.!!
•
Susan!works!partJtime!as!a!lawyer!with!Dewey,!Cheatem!&!H
owe.!!
Last!year,!she!earned!taxable!wages!of!$92,000!and!her!WJ2!s
hows!
the!following!withholdings:!$12,000!of!federal!income!tax,!$7,
000!of!
state!income!tax,!$5,704!of!social!security!taxes,!and!$1,334!o
f!
medicare!taxes.!
•
Both!Bob!and!Susan!are!eligible!for!and!participate!in!a!qualif
ied!
retirement!plan!through!their!employers.!!
!
!
!
!
!

4. •
Susan!also!consults!partJtime!and!operates!as!a!one!member!L
LC!
under!the!business!name!Legal!
Solution
s.!!Her!business!information!is!
as!follows:!
o Consulting!revenues!! ! ! $43,000!
o Professional!malpractice!insurance!! $8,000!
o Advertising!expenses! ! ! $1,000!
o Supplies!expenses! ! ! ! $5,000!
o Meals!and!entertainment!(client!meetings)!$6,000!
o Travel!expenses! ! ! ! $!7,000!
o Professional!licensing!fees!(paid!to!PA)! $!1,200!
o Parking!fines!(paid!to!PA)! ! ! $!750!
o Office!expenses! ! ! ! $3,400!
o Computer!(placed!in!service!6/15/14)! $4,500!
! She!would!like!to!take!the!maximum!depreciation!
allowable!on!this!asset!in!2014!

5. o Cell!phone!(placed!in!service!11/12/14)! $!390!
! Business!use!percentage:!80%!
! She!does!not!want!to!take!Section!179!or!bonus!
depreciation!on!this!asset!
o SUV!weighing!4,800!pounds!! ! $38,000!
! Placed!in!service!8/10/14!
! Business!use!percentage:!100%!
! She!does!not!want!to!take!Section!179!or!bonus!
depreciation!on!this!asset!
•
Bob!and!Susan!also!own!a!rental!property!and!provide!the!foll
owing!
information!to!you:!
o Rental!income! $30,000!
o Mortgage!interest! $12,000!
o Real!estate!taxes! $5,000!
o Utilities! ! $2,000!
o
Gift!to!Congressman!who!helped!them!get!rental!zoning!for!th
e!

6. property! ! $1,500!
o The!rental!house!was!purchased!on!March!3,!2014!and!
immediately!rented.!!The!home!was!purchased!for!$220,000.!
o The!address!is!:!123!Easy!Street,!Country,!TX!76132!
•
In!addition!to!the!above!information,!Bob!and!Susan!provide!y
ou!with!
the!following!information:!
o Paid!home!mortgage!interest!on!home!residence!$18,700!
($400,000!loan!principal)!
o
Paid!interest!on!a!home!equity!loan!used!to!pay!for!a!family!
vacation!to!Europe!($100,000!equity!loan!taken!out!when!FMV
!
of!home!was!$600,000)! ! ! ! $5,200!
o Paid!real!estate!taxes!on!home!residence! ! $7,500!
o Paid!medical!insurance!premiums!and!coJpays! $6,100!

7. o Cash!donations!to!church! ! ! ! $10,500!
o
Clothing!donations!to!Goodwill!($10,000!purchase!price!and!$
!
2,000!thrift!value)!
o
Donation!of!Disney!Stock!to!St.!Jude’s!(a!qualified!charity)!–
!the!
stock’s!FMV!at!date!of!donation!is!$7,000!and!it!was!purchase
d!
on!3/1/10!for!$4,000!
o Cash!donation!to!school!auction!(received!tickets!to!a!
Broadway!play!in!return!valued!at!$400)! ! $750!
o
Received!a!state!income!tax!refund!of!$615!from!their!2013!ta
x!
return!and!applied!it!to!their!2014!tax!liability!

8. o
Paid!$17,000!per!child!for!child!and!dependent!care!expenses!
during!the!year!to!The!Caring!Center,!3000!Oak!Street,!
Philadelphia,!PA!19004;!EIN!#22J1111111!
!
Required:$
!
Prepare!Bob!and!Susan’s!Form!1040!for!2014!by!hand.!Please!
do!not!use!any!tax!
software!for!this!assignment.!Also,!please!make!note!of!any!is
sues!and/or!
recommendations!that!you!have!for!Bob!and!Susan.!
!
What$to$turn$in$(be$sure$to$follow$the$proper$order$of$atta
chment):$
!

9. Form!1040!
Schedules!A,!C,!E,!SE!
!
And!the!following!forms!(to!help!you!finish!the!return):!
!
Form!2441!
Form!4562!
Form!6251!
Form!8283!
Form!8959!
!
Notes!on!any!issues!(concerns)!and/or!recommendations!that!y
ou!have!for!Bob!and!

10. Susan!on!a!word!document!attached!to!the!back!of!the!return.!
!
!
***$Please$turn$in$a$stapled$copy$of$your$tax$return$packet
$(with$all$forms$in$
appropriate$order)$at$the$beginning$of$class$–
$Your$full$name$should$be$at$the$
very$top$of$the$page$on$the$front$page$of$the$packet.$***$
!
!
Due$Date:$
!
Thursday,!December!10,!2014!(beginning!of!class)!
!