TAX RETURN PROJECT
Tim and Sarah Lawrence are married and filing a join return. Tim's social security number is 111-11-1111 and date of birth: 1/1/1966; Sarah's social security number is 112-11-1112 and date of birth: 2/2/1970. They have two children as their dependents: Sean Lawrence (SSN: 212-22-2222, date of birth: 3/5/1993, Student) and Debra Lawrence (SSN: 211-11-1122, date of birth: 3/1/2006). They live at 11000 Bellaire Blvd., Houston, TX 77072.
Tim is a self-employed businessman (sole proprietorship of an unincorporated business). Tim has the following income and expenses
Gross receipts: $80,000
Expenses:
Auto expense: $2,145
Office expenses: $2,350
Legal fees for consultant: $1,750
Accounting & tax fees: $2,450
Fees paid to contract labor / helpers: $15,000
Tim paid estimated tax during the year: $4000 ($1,000/ each quarter)
Sarah is an office executive for ABC Company. The following information shows on her W-2:
|
Line
|
Descriptions
|
Amount
|
|
1
|
Wages, Tips, and other compensation
|
$25,000
|
|
2
|
Federal Income Tax Withheld
|
$3,500
|
|
3.
|
Social Security Wages
|
$25,000
|
|
4
|
Social Security Tax Withheld
|
$1,050
|
|
5.
|
Medicare Wages
|
$25,000
|
|
6
|
Medicare Tax Withheld
|
$362.50
|
During 2015, Sarah and Tim received the following interests and dividends and stock transactions:
Sarah received $2,700 of interest from Trustmark National Bank
Tim and Sarah had a joint saving accounts and received $1,000 of interest from Chase Bank
They have an investment account in TD Ameritrade. As of 12/31/2015, TD Ameritrade sent them Form 1099 shows that: ordinary dividends of $2,000 and qualified dividends of $1,750.
Tim purchased and sold the stocks on his E-trade account as follows:
|
Stock
|
No of Shares
|
Date Purchased
|
Date Sold
|
Per Share Cost
|
Per Share Selling price
|
|
Blue
|
100
|
1/18/2008
|
1/12/2015
|
$80
|
$74
|
|
Green
|
50
|
1/11/2003
|
8/10/2015
|
$127
|
$157
|
|
Purple
|
120
|
1/1/2014
|
2/1/2015
|
$ 60
|
$30
|
During 2015, Tim and Sarah paid $4,550 for Doctors' bills and $500.00 for medical prescriptions. They paid $7,550 of the mortgage interest and $3,210 for property tax for their principal house. They also contributed the total $3,300 to their local church.
During 2015, Due to Sarah's insurance policy is high deductible. Therefore, they purchased Health Saving Accounts of $4,500 for the whole family. Tim contributed $5,000 to his retirement plans (Individual IRA).
Also, Tim paid $1,200/month as alimony to his ex-wife.
During 2015, Sarah attended the seminar related to her job. Yet, the company did not reimburse the travel expense of $1,250 and cost of meals: $350. Her professional due for 2015 was $750.
Sean is the student of University of Texas at Dallas. During 2015, Tim and Sarah paid the tuition fees of $5,000 and cost of room: $3,050. Sean has not finished his 4-year college in 2015 yet.
The following forms should be included in form 1040 2015
Schedule C: Business Income
Schedule B: Interest and Dividends Summary
Schedule D: Capital Gains and Loss and Form 8949
Schedule A: Itemized Deductions.
Schedule SE (Self Employment Tax)
In addition to the above forms, the forms related to Education Credits, etc... may be included.
Students can use any tax softwares (2014 or 2015) to prepare this tax return