This year Evan graduated from college and took a job as a deliveryman in the city. Evan was paid a salary of $68,500 and he received $700 in hourly pay for part-time work over the weekends. Evan summarized his expenses below: Cost of moving his possessions to the city (125 miles away) Interest paid on accumulated student loans Cost of purchasing a delivery uniform Contribution to State University deliveryman program $1,200 2,840 1,440 1,320 Calculate Evan's AGI and taxable income if he files single. Assume that interest payments were initially required on Evan's student loans this year. Evan's AGI Taxable income Requlred Informetlon [The following information applies to the questions displayed below. Read the following letter and help Shady Slim with his tax situation. Please assume that his gross income is $173,520 (which consists only of salary) for purposes of this problem. December 31, 2018 To the friendly student tax preparer: Hi, it's Shady Slim again. Ijust got back from my 55th birthday party, and I'm told that you need some more information from me in order to complete my tax return. I'm an open book! I'1l tell you whateverl think you need to know. Let me tell you a few more things about my life. As you may recall, I am divorced from my wife, Alice. I know that it's unusual, but I have custody of my son, Shady. Jr. The judge owed me a few favors and I really love the kid. He lives with me full-time and my wife gets him every other weekend. I pay the vast majority of my son's expenses. I think Alice should have to pay some child support, but she doesn't have to pay a dime. The judge didn't owe me that much, I guess. I had to move this year after getting my job at Roca Cola. We moved on February 3 of this year, and I worked my job at Roca Cola for the rest of the year. I still live in the same state, but I moved 500 miles away from my old house. I hired a moving company to move our stuff at a cost of $2.320, and I drove Junior in my car. Junior and I got a hotel room along the way that cost us $65 (I love Super 8!) Can you believe I'm still paying off my student loans, even after 15 years? I paid a total of $18,720 in interest on my old student loans this year. Remember when l told you about that guy that hit me with his car? Ihad a bunch of medical expenses that were not reimbursed by the lawsuit or by my insurance. I incurred a total of $20,200 in medical expenses, and I was only reimbursed for $11,100. Good thing I can write off medical expenses, right? I contributed a lot of money to charity this year (and have receipt documentation for all contributions). I'm such a nice guy! I gave $1,020 in cash to the March of Dimes. I contributed some of my old furniture to the church. It was some good stuff! I contributed a red velvet couch and my old recliner. The furniture is considered vintage and is worth $5,100 today (the appraiser surprised me!), even though I only paid $1,020 for it back in the day. When I contributed the furniture, the pastor said he didn't like the fabric and was going to sell the furniture to pay for some more pews in the church. Oh well, some people just have no taste, right? Roca Cola had a charity drive for the United Way this year and I contributed $102. Turns out, I don't even miss it, because Roca Cola takes it right off my paycheck every month...$17 a month starting in July. My pay stub verifies that I contributed the $102 to the United Way. Oh, one other bit of charity from me this year. An old buddy of mine was down on his luck. He lost his job and his house. I gave him $510 to help him out I paid a lot of money in interest this year. I paid a total of $970 in personal credit card interest. I also paid $18,100 in interest on my $520,000 home mortgage that helped me buy my dream home. I also paid $2.040 in real estate taxes for my new house. A few other things I want to tell you about this year. Someone broke into my house and stole my kid's brand new bicycle and my set of golf clubs. The total loss from theft was $920. I paid $135 in union dues this year. I had to pay $1,200 for new suits for my job. Roca Cola requires its managers to wear suits every day on the job. I spent a total of $1,320 to pay for gas to commute to my job this year Oh, this is pretty cool. I've always wanted to be a firefighter. I spent $1,420 in tuition to go to the local firefighter's school. I did this because someone told me that I can deduct the tuition as an itemized deduction, so the money would be coming back to me. That should be all the information you need right now. Please calculate my taxable income and complete pages 1 and 2 of Form 1040 (through taxable income, line 43) and Schedule A. You're still doing this for free, right? Calculate the taxable income. AGI Itemized Deductions: Taxable income To the friendly student tax preparer: Hi, it's Shady Slim again. I just got back from my 55th birthday party, and I'm told that you need some more information from me in order to complete my tax return. I'm an open book! I'll tell you whatever I think you need to know Let me tell you a few more things about my life. As you may recall, I am divorced from my wife, Alice. I know that it's unusual, but I have custody of my son, Shady, Jr. The judge owed me a few favors and I really love the kid. He lives with me full-time and my wife gets him every other weekend. I pay the vast majority of my son's expenses. I think Alice should have to pay some child support, but she doesn't have to pay a dime. The judge didn't owe me that much, I guess I had to move this year after getting my job at Roca Cola. We moved on February 3 of this year, and I worked my job at Roca Cola for the rest of the year. I still live in the same state, but I moved 500 miles away from my old house. I hired a moving company to move our stuff at a cost of $2,320, and I drove Junior in my car. Junior and I got a hotel room along the way that cost us $65 (I love Super 8!) Can you believe I'm still paying off my student loans, even after 15 years? I paid a total of $18,720 in interest on my old student loans this year. Remember when I told you about that guy that hit me with his car? I had a bunch of medical expenses that were not reimbursed by the lawsuit or by my insurance. I incurred a total of $20,200 in medical expenses, and I was only reimbursed for $11,100. Good thing I can write off medical expenses, right? I contributed a lot of money to charity this year (and have receipt documentation for all contributions). I'm such a nice guy! I gave $1,020 in cash to the March of Dimes. I contributed some of my old furniture to the church. It was some good stuff! contributed a red velvet couch and my old recliner. The furniture is considered vintage and is worth $5,100 today (the appraiser surprised me!), even though I only paid $1,020 for it back in the day. When I contributed the furniture, the pastor said he didn't like the fabric and was going to sell the furniture to pay for some more pews in the church. Oh well, some people just have no taste, right? Roca Cola had a charity drive for the United Way this year and I contributed $102. Turns out, I don't even miss it, because Roca Cola takes it right off my paycheck every month$17 a month starting in July. My pay stub verifies that I contributed the $102 to the United Way. Oh, one other bit of charity from me this year. An old buddy of mine was down on his luck. He lost his job and his house. I gave him $510 to help him out. I paid a lot of money in interest this year. I paid a total of $970 in personal credit card interest. I also paid $18,100 in interest on my $520,000 home mortgage that helped me buy my dream home. I also paid $2,040 in real estate taxes for my new house A few other things I want to tell you about this year. Someone broke into my house and stole my kid's brand new bicycle and my set of golf clubs. The total loss from theft was $920. I paid $135 in union dues this year. I had to pay $1,200 for new suits for my job. Roca Cola requires its managers to wear suits every day on the job. I spent a total of $1,320 to pay for gas to commute to my job this year Oh, this is pretty cool. I've always wanted to be a firefighter.I spent $1,420 in tuition to go to the local firefighter's school.I did this because someone told me that I can deduct the tuition ba itemized deduction o the money would be coming 1040 s. individual Income Tax Retum 20 1eu ony rt OMB No. 1545-0074 IRS Use Only Do not wrte or staple in this space See separate instructions. Your social security number For the year Jan. 1-Dec. 31, 2015, or other tax year beginning If a joint return, spouse's first name and initial Spouse's social security number and stroet). It youh Make sure the SSNs) above City, town or post cffice, state, and AP code. If you have a foreign address, also complete spaces below (see instructions Check here t you, ar your spouse if hiling lony.wattogototts tid. Choking Foreign country name Foreign postal code abox belcw will not change your tax ar Single 2 4 Head of household (with quaryng personl.soe instructions.) If the qualitying person is a child but nat your dependent, enter this child's name here. Filing Status Married filing jointly (even if only one had income) Check only one 3 Married filing separately. Enter spouse's SSN above box and full name here. ourself.If someone can claim you as a dependent, do not check bax 6a a) Dependent's 4 chid under age 17 oyouqualifying far child tax credt 6a and 6b No. of children ved with you social securnty number If more than four instructions and check here d Total number of exemptions claimed 7 8a b 9a Wages, salaries, tips, etc. Attach Form(s) W-2 Taxable interest. Attach Schedule B if required Tax-exempt interest. Do not include on line 8a Ordinary dividends. Attach Schedule B if required Income .. 8b Attach Form(s) W-2 here. Also b Qualified dividends attach Forms W-2G and 1099-R if tax was withheld.1 Alimony received 10 Taxable refunds, credits, or offsets of state and local income taxes 10 12 Business income or (loss). Attach Schedule Cor C-EZ 13 Capital gain or (loss). Attach Schedule D if required. If not required, check here 14 13 If you did not get a W-2 Other gains or(osse). Attach Form 4797 IRA distributions b Taxable amount 15a 16a Pensions and annuities 16a 17 Rental real estate, royalties, partnerships, S corporations, trusts, etc. Attach Schedule E 18 Farm income or (loss). Attach Schedule F 19 Unemplayment compensation 20a Social security beneits 20a 21 Other income. List type and amount 22 Combine the amounts in the far right column for lines 7 through 21. This is your total income 15b 16b 17 b Taxable amount b Taxable amount 21 23 Adjusted2 Gross 24 Certain business expenses of reservists, performing artists, and fee-basis govemment officials. Attach Form 2106 ar 2106-EZ Health savings account deduction. Attach Form 8889 24 25 27 Deductible part of self-employment ta. Attach Schedule SE 28 Sel-employed SEP, SIMPLE, and qualified plans 29 Self-employed health insurance deduction 30 Penalty on early withdrawal of savings 31a Alimony paid b Recipient's SSN 32 IRA deduction 33 Student loan interest deduction 34 Tuition and fees. 35 Domestic production activities deduction. Attach Form 8903 35 36 Add lines 23 through 35 37 Subtract line 36 from line 22. This is your adjusted gross income 29 Attach Form 8917 For Disclosure, Privacy Act, and Paperwork Reduction Act Notice, see separate instructions. Cat. No. 113208 Farm 1040 (2015) Form 1040 (2015) 38 Amount from line 37 (adjusted gross income) 39a CheckYou were bom before January 2, 1951, Blind. Total boxes Tax and Credits Spouse was born before January 2,1 Blind checked 39a b Ifyour spouse itemizes on a separate retum or you were a dual-status alien, check here39b Standard40 emized deductions (from Schedule A) or your standard deduction (see left margin) Deduction4Subtract line 40 from 40 line 40 from ine 38 People who check any 42 3 44 Exemptions. If line 38 is $154,950 or less, muliply $4,000 by the number an line 6d. Otherwise, see instructions Taxable income. Subtract line 42 from line 41. If line 42 is more than line 41, enter -0- 42 box on ine whoor 3 ber Tax(see instructions). Check if any from:aOFormis) 8814 b Form 4972 c claimed as a45 Alternative minimum tax (see instructions Attach Form 6251 46 Iinstructions47 Add lines 44, 45, and 46 48 Foreign tax credit. Attach Form 1116 if required Married fiing 49 Credit for child and dependent care expenses. Attach Form 2441 49 50 Education credits from Form 8863, line 19 Married fiing 51 Retirement savings contributions credit. Attach Form 8880 51 52 53 Child tax credit. Attach Schedule 8812, if required Residential energy credits. Attach Form 5695 53 $12,600 Head of 54Oher aredits from Fom a3800 b8801 c housshold.55 o.z50old55 Add lines 48 through 54. These are your total credits 56 57 Subtract ine 55 from line 47. If line 55 is more than ine 47, enter-0. Self-employment tax. Attach Schedule SE Other 58 Unreported social security and Medicare tax from Form:41378919 59 Additional tax on IRAs, other qualified retirement plans, etc. Attach Form 5329 if required 60a Household employment taxes from Schedule H Taxes b First-time homebuyer credit repayment. Attach Form 5405 if required 61 Health care: individual responsibiity (see instructions) Full-year coverage 62 Taxes from: aFom 8959 bForm 8960 cInstructions; enter code(s) 63 Add lines 56 through 62. This is your total tax 62 Payments 64 Federal income tax withheld from Forms W-2 and 1099 If you have a 66a Earned income credit (EIC) Schedule EIC 67 Additional chid tax credit. Attach Schedule 8812 64 65 2015estimated tax payments and amount applied from 2014 return65 b Nontaxable combat pay election66b 69 Net premium tax credit. Attach Form 8962 70 Amount paid with request for extension to file 71 Excess social security and tier 1 RRTA tax withheld 72 Credit for federal tax on fuels. Attach Form 4136 69 71 72 73 74 75 76a Amount of line 75 you want refunded to you. If Form 8888 is attached, check here76a Add lines 64, 65, 66a, and 67 through 73. These are your total payments ine 74 is more than line 63, subtract line 63 from line 74. This is the amount you overpaid Refund 75 Drect deposit? b Routing number d Account number Amount of ine 75 you want 77 2016 estimated tax7 mount 78 Amount you owe. Subtract line 74 from line 63. For details on how to pay, see instructions78 You Owe 79 Estimated tax penalty (see instructions) Third Party Do you want to allow another person to discuss this return with the IRS (see instructionsj? Yes. Complete below. No Designee Damignoe' Sign Personal identitication Under penalties of perjury, I daclare that I have examined this setum and accompanying schedules and staements, and to the best of my knowladge and belia they are true, coect, and complato. Declaration of preparer fother than taxpayer) is based on all information of which preparer has any knowledge. Your signature Your ocoupation Daytime phone number Keep a copy forSpouse's signature. If a joint retum, both must sign your rocords Date It the IRS sent you an ldentity Protection PIN, enter it ype proparers name Preparer's signature elf-employed Preparer Use Only Frms nams Firms address Firm's EN Form 1040 (2015 Jeremy and Alyssa Johnson have been married for five years and do not have any children. Jeremy was married previously and has one child from the prior marriage. He is self-employed and operates his own computer repair store. For the first two months of the year, Alyssa worked for Office Depot as an employee. In March, Alyssa accepted a new job with Super Toys Inc. (ST), where she worked for the remainder of the year. This year, the Johnsons received $268,000 of gross income a. Expenses associated with Jeremy's store include $43,250 in salary (and employment taxes) to employees, $48,900 of supplies and $19,300 in rent and other administrative expenses. b. As a salesperson, Alyssa incurred $2,130 in travel expenses related to her employment that were not reimbursed by her employer C. The Johnsons own a piece of raw land held as an investment. They paid $630 of real property taxes on the property and they incurred $265 of expenses in travel costs to see the property and to evaluate other similar potential investment properties d. The Johnsons own a rental home. They incurred $8,630 of expenses associated with the property e. Jeremy paid $4,630 for health insurance coverage for himself (not through an exchange). Alyssa was covered by health plans provided by her employer, but Jeremy is not eligible for the plan until next year. f. Jeremy paid $2,630 in self-employment taxes ($1,315 represents the employer portion of the self-employment taxes) g. Jeremy paid $5,260 in alimony and $3,195 in child support from his prior marriage (divorced in 2010). h. The Johnsons donated $2,130 to their favorite charity. Determine the Johnson's AGI given the above information Johnson's AGI