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Nathan Cohen , age 45, is a single taxpayer who lives at 2245 Mardel St., San Jose, CA 95130. His social security number is 351-42-1961. Nathans earnings and withholdings as a marketing director at a high-tech company for 2020 are: Earnings from Placeware, Inc. $297,000 (this is after subtracting his health insurance premiums see below) Federal Income tax withheld $50,000 State income tax withheld $23,500 Other facts and possibly useful information: Nathan earns interest on a savings account at Bank of the West of $13,075. Nathan is divorced, the divorce was final May 3, 2016, and pays his ex-wife $4,000 per month. When their 15-year old daughter (who lives 100% with the ex-wife) reaches 18, the payments drop to $2,800 per month. The reason it drops is because he is no longer paying child support once his daughter turns 18. His ex-wifes social security number is 857-51-6438. Nathan does not claim his daughter as a dependent. Nathan paid the following amounts (he has records to prove payment): California DMV renewal taxes (the value based part) : $300 Credit card interest expense $1,760 Auto Loan interest expense $4,300 Property taxes on his home $6,200 Blue Cross health insurance premiums $1,800 withheld from his paycheck (not deducted on Sch A, already paid with pretax dollars!). Other medical expenses $790 Income tax preparation fees for his 2019 income tax return $900, which he paid on April 2020 when his 2019 taxes were prepared. Federal 2019 income taxes paid in April 2020 when he filed his 2019 federal income tax return $1,825 California 2019 income taxes paid in April 2020 when he filed his 2019 California tax return $500 Check to Boy Scouts of America $1,100 Check for fundraiser to build a new building at Harker School, where his daughter goes, $8,000. This payment was not related to tuition and neither Nathan nor his family received any specific benefits. Check to St. Andrews Church $10,000 Stanford Business School Alumni Association $12,000 (fundraiser to support the business school) Silicon Valley Democratic Party Fund $1,000 (2020 campaign fundraiser) Nathan paid $100 to attend a fundraising dinner at the Tech Museum of Innovation, the value of the dinner is $50. Nathan received a Form 1098 Mortgage Interest Statement from Bank of the West indicating $19,700 of interest expense on his mortgage (a qualified acquisition mortgage) Complete Nathans Form 1040, Schedules 1 & 2, Schedule A, Schedule B, Forms 8959 and 8960 . Dont forget he paid state taxes and they should be deducted on Schedule A. If you need to make assumptions, they should be realistic. Hint: Form 8959, lines 7, 18, 22 and 24 should be $873, and form 8960, Line 17 should be $454, and that the total of these additional taxes belong on Schedule 2 (you figure out where on Sch 2), and on line 23 of Form 1040. Line 25d on page 2 of Form 1040 should be $50,873. The additional amount of $873 would have been on his W-2 because his employer would have deducted this amount. Yes, you calculate the $873 additional tax but because it was already withheld by the employer, it is considered tax withheld, a credit towards the tax liability calculated on the tax return.

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