I do not have the h&r block software 45 Tax Return Problem - Decision Making Ali

Question

I do not have the h&r block software 45 Tax Return Problem - Decision Making Alilce J. and Bruce M Byrd are married taxpayers who file a joint retum. Their Social Security H&R; numbers are 123-45-6789 and 111-11-1112, respectively. Alice's birthday is September 21, 1969, and Bruce's is June 27, 1968. They live at 473 Revere Avenue, Lowell MA 0185so. Alice is the office manager for Lowell Dental Clinic, 433 Broad Street, Lowell MA 018s0 (emjloyer identification number 98-7654321), Bruce is the manager of a Super Burgers fast-food outlet owned and operated by Plymout Corporation, 1247 Central Avenue, Hauppauge, NY 11788 (employer identification number The following information is shown on their Wage and Tax Statements (Form W-2) for 2016. Line Description Alice Bruce wages, tips, other compensation 2 Federal income tax withheld 3 Socal Security wages 4 Socal Security tax withheld 5 Medicare wages and tips 6 Medicare tax withheld 15 State $62,100 6,300 62,100 3,850 62,100 900 $58,000 58,000 3,596 58,000 841 16 State wages, tips, etc 17 State income tax withheld 58,000 2,950 62,100 3,100 The Byrds provide over half of the support of their two children, Cynthia (born January 25, 1992, Social Security number 123-45-6788) and john (bon February 7, 1996, Social Security number 123-45-6786). Both children are full-time students and live with the Byrds except when they are away at college. Cynthia earned $4,200 from a summer internship in 2016, and John eamed $3,800 from a part-time job. During 2016, the Byrds provided 60% of the total support of Bruce's widower father, Sam Byrd (born March 6, 1940, Social Security number 123-45-6787). Sam lived alone and covered the rest of his support with his Social Security benefits. Sam died in November, and Bruce, the beneficlary of a policy on Sam's life, recelved life insurance proceeds of $1,600,000 on December 28. The Byrds had the following expenses relating to their personal residence during 2016 Property taxes Qualified interest on home mortgage Repairs to roof Utilities Fire and theft insurance $5,000 8,700 5,750 4,100 1,900

Explanation / Answer

Solution.

A tax schedule is a form the IRS requires you to prepare in addition to your tax return when you have certain types of income or deductions. These commonly include things like significant amounts of interest income, mortgage interest or charitable contributions. Generally, the totals you compute on these schedules are transferred to your Form 1040. When you qualify to complete a simpler tax form, such as the Form 1040EZ, then additional schedules are not required.

Schedule A

If you elect to itemize your deductions rather than claim the standard deduction, then you must prepare a Schedule A and attach it to your Form 1040. Schedule A is the tax form where you report the amount of your itemized deductions. Some of the itemized deductions listed on Schedule A include medical and dental expenses, various state taxes, mortgage interest, charitable contributions and work-related expenses. If your Schedule A total exceeds the standard deduction, you are typically better off itemizing your deductions.

Schedule B

Schedule B is an income schedule that requires you to separately list the sources of interest and dividend payments you receive during the year. You can use Schedule B with both Forms 1040 and 1040A. However, preparation of the schedule is only necessary when your interest or dividend income exceeds the IRS threshold for the year - $1,500 in 2016. For example, if you only earn $200 of bank interest this year, you must include this amount in your taxable income, but preparing a Schedule B is not necessary.

Schedules C and C-EZ

Schedules C and C-EZ are forms that you use to report self-employment income. Essentially, both forms separately report your business earnings and deductions to arrive at your net business profit or loss, which is then added to your other income on Form 1040. If you have a single business with simple accounting that meets IRS qualifications, you can use the shorter Schedule C-EZ, rather than Schedule C.

Schedule D

If you sell a capital asset during the year, then you must report it on a Schedule D attachment to your tax return. Capital assets transactions commonly report the gains and losses when you sell stocks, but can include any other property you sell during the year such as your home or car. The form separates the transactions into short-term and long-term transactions depending on whether you own the property for more than one year or not. Your short-term capital gains are taxed at the same rate as your other income, but your long-term gains are taxed at lower rates.

Schedule EIC

Schedule EIC is where you report your qualifications for claiming the earned income tax credit. The earned income tax credit is a refundable tax credit you can claim if you have qualifying children, and your income falls below a certain level. You can use Schedule EIC for both Forms 1040 and 1040A.

Schedule SE

If you are self-employed, you are responsible for paying Social Security tax on your earnings since an employer is not withholding it for you. You compute the amount of your self-employment tax on Schedule SE.

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