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Instructions Note: This problem is for the 2018 tax year. Alfred E. Old and Beulah A. Crane, each age 42, married on September 7, 2016. Alfred and Beulah will file a joint return for 2018. Alfred's Social Security number is 111-11-1109. Beulah's Social Security number is 123-45-6780, and she adopted "Old" as her married name. They live at 211 Brickstone Drive, Atlanta, GA 30304. Alfred was divorced from Sarah Old in March 2016. Under the divorce agreement, Alfred is to pay Sarah $1,250 per month for the next 10 years or until Sarah's death, whichever occurs first. Alfred pays Sarah $15,000 in 2018. In addition, in January 2018, Alfred pays Sarah $50,000, which is designated as being for her share of the marital property. Also, Alfred is responsible for all prior years' income taxes. Sarah's Social Security number is 123-45- 6788. Alfred's salary for 2018 is $150,000. He is an executive working for Cherry, Inc. (Federal 1.D. No. 98-7654321). As part of his compensation package, Cherry provides him with group term life insurance equal to twice his annual salary. His employer withheld $24,900 for Federal income taxes and $8,000 for state income taxes. The proper amounts were withheld for FICA taxes. Beulah recently graduated from law school and is employed by Legal Aid Society, Inc. (Federal I.D. No. 11- 1111111), as a public defender. She receives a salary of $42,000 in 2018. Her employer withheld $7,500 for Federal income taxes and $2,400 for state income taxes. The proper amounts were withheld for FICA taxes. Alfred and Beulah had interest income of $500. Alfred and Beulah receive a $1,900 refund on their 2017 state income taxes. They itemized deductions on their 2017 Federal income tax return (total of $15,000). Alfred and Beulah pay $4,500 interest and $1,450 property taxes on their personal residence in 2018. Their charitable contributions total $2,400 (all to their church). They paid sales taxes of $1,400, for which they maintain the receipts. Both spouses had health insurance for all months of 2018 and do not want to contribute to the Presidential Election Campaign. Required: Compute the Olds' net tax payable (or refund due) for 2018. Use Form 1040 and Schedule 1 to complete this tax return It may be necessary to complete the tax schedule and worksheet before completing Form 1040. Enter all amounts as positive numbers. If an amount box does not require an entry or the answer is zero, enter "O". Make realistic assumptions about any missing data. When computing the tax liability, do not round your immediate calculations. If required round your final answers to the nearest dollar. Use the 2018 Tax Rate Schedule provided. Do not use the Tax Tables. Alaala and 12 > Refund . Thousehold Schedule Single Schedule X of the If taxable of the amount If taxable income is! Over But not income is amount over But not over over The tax is The tax ist Over over $0 $0 $0 $ 9,875 $0 14,100 -... 1096 ... 109 $987.50 + 1296 9.875 40,125 9,875 14,100 53,700 $ 1,410.00 + 129 14,100 40,125 85.525 40,125 53,700 85,500 6,162.00 + 229% 53,700 4,617.50 + 229 14,605.50 + 24% 85,525 163,300 85,525 85,525 85,500 163,300 13,158.00 + 24% 207.350 163,300 163,300 207,350 31,830.00 + 3290 163,300 33,271.50 + 32% 47,367.50 + 35% 163,300 207,350 207,350 518.400 207,350 518,400 45,926.00 + 35% 207,350 518,400 518.400 156,235.00 + 37% 518,400 518,400 . 154,793.50 + 37% Married filing jointly or Qualifying widow(er)-Schedule Y-1 Married filing separately-Schedule Y-2 If taxable But not of the amount over of the amount If taxable income is: Over income isi Over But not over The tax is: over The tax is: over $0 5 19.750 ... 109 $0 50 59.875 ***** 10% $0 19.750 B0.250 $ 1,975.00 + 12% 9.875 40.125 9,875 19,750 80,250 $ 987.50 + 129 4,617.50 + 2296 BO,250 171.050 9,235.00 + 22 40.135 B5.525 40,125 171.050 326.600 29,211.00 + 249 171,050 85,528 163 300 14,605.50 + 249 85,325 N 414,700 06,543.00 + 32% 326,000 163200 207,350 33,271.50 + 329 326,600 -14.00 163,300 207 350 622.00 94,735.00 + 3596 414,700 207250 11.025 47,367.50 + 359 6205 107,307.50 + 329 622,050 011025 83,653.75 +37% 311.025 Instructions Note: This problem is for the 2018 tax year. Alfred E. Old and Beulah A. Crane, each age 42, married on September 7, 2016. Alfred and Beulah will file a joint return for 2018. Alfred's Social Security number is 111-11-1109. Beulah's Social Security number is 123-45-6780, and she adopted "Old" as her married name. They live at 211 Brickstone Drive, Atlanta, GA 30304. Alfred was divorced from Sarah Old in March 2016. Under the divorce agreement, Alfred is to pay Sarah $1,250 per month for the next 10 years or until Sarah's death, whichever occurs first. Alfred pays Sarah $15,000 in 2018. In addition, in January 2018, Alfred pays Sarah $50,000, which is designated as being for her share of the marital property. Also, Alfred is responsible for all prior years' income taxes. Sarah's Social Security number is 123-45- 6788. Alfred's salary for 2018 is $150,000. He is an executive working for Cherry, Inc. (Federal 1.D. No. 98-7654321). As part of his compensation package, Cherry provides him with group term life insurance equal to twice his annual salary. His employer withheld $24,900 for Federal income taxes and $8,000 for state income taxes. The proper amounts were withheld for FICA taxes. Beulah recently graduated from law school and is employed by Legal Aid Society, Inc. (Federal I.D. No. 11- 1111111), as a public defender. She receives a salary of $42,000 in 2018. Her employer withheld $7,500 for Federal income taxes and $2,400 for state income taxes. The proper amounts were withheld for FICA taxes. Alfred and Beulah had interest income of $500. Alfred and Beulah receive a $1,900 refund on their 2017 state income taxes. They itemized deductions on their 2017 Federal income tax return (total of $15,000). Alfred and Beulah pay $4,500 interest and $1,450 property taxes on their personal residence in 2018. Their charitable contributions total $2,400 (all to their church). They paid sales taxes of $1,400, for which they maintain the receipts. Both spouses had health insurance for all months of 2018 and do not want to contribute to the Presidential Election Campaign. Required: Compute the Olds' net tax payable (or refund due) for 2018. Use Form 1040 and Schedule 1 to complete this tax return It may be necessary to complete the tax schedule and worksheet before completing Form 1040. Enter all amounts as positive numbers. If an amount box does not require an entry or the answer is zero, enter "O". Make realistic assumptions about any missing data. When computing the tax liability, do not round your immediate calculations. If required round your final answers to the nearest dollar. Use the 2018 Tax Rate Schedule provided. Do not use the Tax Tables. Alaala and 12 > Refund . Thousehold Schedule Single Schedule X of the If taxable of the amount If taxable income is! Over But not income is amount over But not over over The tax is The tax ist Over over $0 $0 $0 $ 9,875 $0 14,100 -... 1096 ... 109 $987.50 + 1296 9.875 40,125 9,875 14,100 53,700 $ 1,410.00 + 129 14,100 40,125 85.525 40,125 53,700 85,500 6,162.00 + 229% 53,700 4,617.50 + 229 14,605.50 + 24% 85,525 163,300 85,525 85,525 85,500 163,300 13,158.00 + 24% 207.350 163,300 163,300 207,350 31,830.00 + 3290 163,300 33,271.50 + 32% 47,367.50 + 35% 163,300 207,350 207,350 518.400 207,350 518,400 45,926.00 + 35% 207,350 518,400 518.400 156,235.00 + 37% 518,400 518,400 . 154,793.50 + 37% Married filing jointly or Qualifying widow(er)-Schedule Y-1 Married filing separately-Schedule Y-2 If taxable But not of the amount over of the amount If taxable income is: Over income isi Over But not over The tax is: over The tax is: over $0 5 19.750 ... 109 $0 50 59.875 ***** 10% $0 19.750 B0.250 $ 1,975.00 + 12% 9.875 40.125 9,875 19,750 80,250 $ 987.50 + 129 4,617.50 + 2296 BO,250 171.050 9,235.00 + 22 40.135 B5.525 40,125 171.050 326.600 29,211.00 + 249 171,050 85,528 163 300 14,605.50 + 249 85,325 N 414,700 06,543.00 + 32% 326,000 163200 207,350 33,271.50 + 329 326,600 -14.00 163,300 207 350 622.00 94,735.00 + 3596 414,700 207250 11.025 47,367.50 + 359 6205 107,307.50 + 329 622,050 011025 83,653.75 +37% 311.025

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