Lance H. and Wanda B. Dean are married and live at 431 Yucca
Drive, Santa Fe, NM 87501. Lance works for the convention bureau of
the local Chamber of Commerce, while Wanda is employed part-time as
a paralegal for a law firm.
During 2016, the Deans had the following receipts:
| Salaries ($60,000 for Lance, $41,000 for Wanda) |
|
|
|
$101,000 |
| Interest income— |
|
|
|
|
| City of Albuquerque general purpose
bonds |
|
$1,000 |
|
|
| Ford Motor company bonds |
|
1,100 |
|
|
| Ally Bank certificate of deposit |
|
400 |
|
2,500 |
| Child support payments from John Allen |
|
|
|
7,200 |
| Annual gifts from parents |
|
|
|
26,000 |
| Settlement from Roadrunner Touring Company |
|
|
|
90,000 |
| Lottery winnings |
|
|
|
600 |
| Federal income tax refund (for tax year 2015) |
|
|
|
400 |
Wanda was previously married to John Allen. When they divorced
several years ago, Wanda was awarded custody of their two children,
Penny and Kyle. (Note: Wanda has never issued a Form 8332 waiver.)
Under the divorce decree, John was obligated to pay alimony and
child support—the alimony payments were to terminate if Wanda
remarried.
In July, while going to lunch in downtown Santa Fe, Wanda was
injured by a tour bus. As the driver was clearly at fault, the
owner of the bus, Roadrunner Touring Company, paid her medical
expenses (including a one-week stay in a hospital). To avoid a
lawsuit, Roadrunner also transferred $90,000 to her in settlement
of the personal injuries she sustained.
The Deans had the following expenditures for 2016:
| Medical expenses (not covered by insurance) |
|
|
|
$7,200 |
| Taxes— |
|
|
|
|
| Property taxes on personal residence |
|
$3,600 |
|
|
| State of New Mexico income tax (includes
amount withheld |
|
|
|
|
| from wages during 2016) |
|
4,200 |
|
7,800 |
| Interest on home mortgage (First National Bank) |
|
|
|
6,000 |
| Paid church pledge |
|
|
|
3,600 |
| Life insurance premiums (policy on Lance's life) |
|
|
|
1,200 |
| Contribution to traditional IRA (on Wanda's behalf) |
|
|
|
5,000 |
| Traffic fines |
|
|
|
300 |
| Contribution to the reelection campaign fund of the mayor of
Santa Fe |
|
|
|
500 |
| Funeral expenses for Wayne Boyle |
|
|
|
6,300 |
The life insurance policy was taken out by Lance several years
ago and designates Wanda as the beneficiary. As a part-time
employee, Wanda is excluded from coverage under her employer's
pension plan. Consequently, she provides for her own retirement
with a traditional IRA obtained at a local trust company. Because
the mayor is a member of the local Chamber of Commerce, Lance felt
compelled to make the political contribution.
The Deans' household includes the following, for whom they
provide more than half of the support:
|
Social Security Number |
Birth Date |
| Lance Dean (age 42) |
123-45-6786 |
12/16/1974 |
| Wanda Dean (age 40) |
123-45-6787 |
08/08/1976 |
| Penny Allen (age 19) |
123-45-6788 |
10/09/1997 |
| Kyle Allen (age 17) |
123-45-6789 |
05/03/1999 |
| Wayne Boyle (age 75) |
123-45-6785 |
06/15/1941 |
Penny graduated from high school on May 9, 2016, and is
undecided about college. During 2016, she earned $8,500 (placed in
a savings account) playing a harp in the lobby of a local hotel.
Wayne is Wanda's widower father who died on January 20, 2016. For
the past few years, Wayne qualified as a dependent of the
Deans.
Federal income tax withheld is $5,200 (Lance) and $3,100
(Wanda). The proper amount of Social Security and Medicare tax was
withheld.
Required:
Determine the Federal income tax for 2016 for the Deans on a
joint return by completing the appropriate forms. Use Form 1040 and
Schedule A to complete this tax return. They do not want to
contribute to the Presidential Election Campaign Fund. All members
of the family had health care coverage for all of 2016. If an
overpayment results, it is to be refunded to them.
Make realistic assumptions about any missing data.
Enter all amounts as positive numbers.
If an amount box does not require an entry or the answer is
zero, enter "0".
When computing the tax liability, do not round your immediate
calculations. If required round your final answers to the nearest
dollar.
Lance H. and Wanda B. Dean are married and live at 431 Yucca
Drive, Santa Fe, NM 87501. Lance works for the convention bureau of
the local Chamber of Commerce, while Wanda is employed part-time as
a paralegal for a law firm. During 2016, the Deans had the
following receipts: Salaries ($60,000 for Lance, $41,000 for Wanda)
$101,000 Interest income— City of Albuquerque general purpose bonds
$1,000 Ford Motor company bonds 1,100 Ally Bank certificate of
deposit 400 2,500 Child support payments from John Allen 7,200
Annual gifts from parents 26,000 Settlement from Roadrunner Touring
Company 90,000 Lottery winnings 600 Federal income tax refund (for
tax year 2015) 400 Wanda was previously married to John Allen. When
they divorced several years ago, Wanda was awarded custody of their
two children, Penny and Kyle. (Note: Wanda has never issued a Form
8332 waiver.) Under the divorce decree, John was obligated to pay
alimony and child support—the alimony payments were to terminate if
Wanda remarried. In July, while going to lunch in downtown Santa
Fe, Wanda was injured by a tour bus. As the driver was clearly at
fault, the owner of the bus, Roadrunner Touring Company, paid her
medical expenses (including a one-week stay in a hospital). To
avoid a lawsuit, Roadrunner also transferred $90,000 to her in
settlement of the personal injuries she sustained. The Deans had
the following expenditures for 2016: Medical expenses (not covered
by insurance) $7,200 Taxes— Property taxes on personal residence
$3,600 State of New Mexico income tax (includes amount withheld
from wages during 2016) 4,200 7,800 Interest on home mortgage
(First National Bank) 6,000 Paid church pledge 3,600 Life insurance
premiums (policy on Lance's life) 1,200 Contribution to traditional
IRA (on Wanda's behalf) 5,000 Traffic fines 300 Contribution to the
reelection campaign fund of the mayor of Santa Fe 500 Funeral
expenses for Wayne Boyle 6,300 The life insurance policy was taken
out by Lance several years ago and designates Wanda as the
beneficiary. As a part-time employee, Wanda is excluded from
coverage under her employer's pension plan. Consequently, she
provides for her own retirement with a traditional IRA obtained at
a local trust company. Because the mayor is a member of the local
Chamber of Commerce, Lance felt compelled to make the political
contribution. The Deans' household includes the following, for whom
they provide more than half of the support: Social Security Number
Birth Date Lance Dean (age 42) 123-45-6786 12/16/1974 Wanda Dean
(age 40) 123-45-6787 08/08/1976 Penny Allen (age 19) 123-45-6788
10/09/1997 Kyle Allen (age 17) 123-45-6789 05/03/1999 Wayne Boyle
(age 75) 123-45-6785 06/15/1941 Penny graduated from high school on
May 9, 2016, and is undecided about college. During 2016, she
earned $8,500 (placed in a savings account) playing a harp in the
lobby of a local hotel. Wayne is Wanda's widower father who died on
January 20, 2016. For the past few years, Wayne qualified as a
dependent of the Deans. Federal income tax withheld is $5,200
(Lance) and $3,100 (Wanda). The proper amount of Social Security
and Medicare tax was withheld. Required: Determine the Federal
income tax for 2016 for the Deans on a joint return by completing
the appropriate forms. Use Form 1040 and Schedule A to complete
this tax return. They do not want to contribute to the Presidential
Election Campaign Fund. All members of the family had health care
coverage for all of 2016. If an overpayment results, it is to be
refunded to them. Make realistic assumptions about any missing
data. Enter all amounts as positive numbers. If an amount box does
not require an entry or the answer is zero, enter "0". When
computing the tax liability, do not round your immediate
calculations. If required round your final answers to the nearest
dollar.
Complete Form 1040 below for Lance and Wanda Dean.
| Form 1040 |
Department of the Treasury—Internal Revenue Service (99)
U.S. Individual Income Tax Return |
2016 |
OMB No. 1545-0074 |
IRS Use Only—Do not write or staple in this space. |
| For the year Jan. 1–Dec. 31, 2016, or other tax year
beginning |
,2016, ending |
,20 |
See separate instructions. |
Your first name and initial
LANCE H |
Last name
DEAN |
Your social security number
123-45-6786 |
If a joint return, spouse's first name and initial
WANDA B |
Last name
DEAN |
Spouse's social security number
123-45-6787 |
Home address (number and street). If you have a
P.O. box, see instructions.
431 YUCCA DRIVE |
Apt. no. |
? Make sure the SSN(s) above and on line 6c are correct. |
City, town or post office, state, and ZIP code. If
you have a foreign address, also complete spaces below (see
instructions).
SANTA FE NM 87501 |
Presidential Election Campaign
Check here if you, or your spouse if filing jointly, want $3 to go
to this fund. Checking a box below will not change your tax or
refund.
? You ?
Spouse
|
| Foreign country name |
Foreign province/state/country |
Foreign postal code |
| Filing status |
|
Married filing jointly |
| Exemptions |
6a |
Yes Yourself. |
If someone can claim you as a dependent, do
not check box 6a . . . . . . . . . . . . . . . . . . . . .
. . . . . . . |
} |
| Boxes checked on 6a and 6b |
|
|
No. of children on 6c who:
• lived with you
|
|
| • did not live with you due to divorce or separation
(see instructions) |
|
|
Dependents on 6c not entered above
|
|
| Add numbers on lines above ? |
|
|
| b |
Yes Spouse |
. . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . |
If more than
four dependents,
see instructions and check here. ? ? |
c |
Dependents: |
(2)Dependent's social security number |
(3)Dependent's relationship to you |
(4) ? If child under age 17
qualifying for child tax credit (see instructions) |
|
|
|
| PENNY ALLEN |
123-45-6788 |
Daughter |
|
| KYLE ALLEN |
123-45-6787 |
Son |
|
| WAYNEBOYLE |
123-45-6785 |
Parent |
|
|
|
|
|
| d |
Total number of exemptions claimed . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . |
Income
Attach
Form(s) W-2
here. Also
attach
Forms
W-2G and
1099-R if
tax was
withheld.
If you did not
get a W-2, see
instructions. |
7 |
Wages, salaries, tips, etc. Attach Form(s) W-2 . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
7 |
|
|
| 8a |
Taxable interest. Attach Schedule
B if required . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . |
8a |
|
|
| b |
Tax-exempt interest. Do
not include on line 8a . . . . . . . . . |
8b |
|
|
|
|
|
| 9a |
Ordinary dividends. Attach Schedule B if required .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
9a |
|
|
| b |
Qualified dividends . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . |
9b |
|
|
|
|
|
| 10 |
Taxable refunds, credits, or offsets of state and
local income taxes . . . . . . . . . . . . . . . . . . |
10 |
|
|
| 11 |
Alimony received . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . |
11 |
|
|
| 12 |
Business income or (loss). Attach Schedule C or
C-EZ . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
12 |
|
|
| 13 |
Capital gain or (loss). Attach Schedule D if
required. If not required, check here . . . . . ? ? |
13 |
|
|
| 14 |
Other gains or (losses). Attach Form 4797 . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
14 |
|
|
| 15a |
IRA distributions . . . . . . . . . . |
15a |
|
|
b |
Taxable amount . . . |
15b |
|
|
| 16a |
Pensions and annuities . . . . . |
16a |
|
|
b |
Taxable amount . . . |
16b |
|
|
| 17 |
Rental real estate, royalties, partnerships, S
corporations, trusts, etc. Attach Schedule E |
17 |
|
|
| 18 |
Farm income or (loss). Attach Schedule F . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
18 |
|
|
| 19 |
Unemployment compensation . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. |
19 |
|
|
| 20a |
Social security benefits . . . . . . |
20a |
|
|
b |
Taxable amount . . . |
20b |
|
|
| 21 |
| Other income. List type and amount |
Gambling/Lottery |
|
21 |
|
|
| 22 |
Combine the amounts in the far right column for
lines 7 through 21. This is your total income ? .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . |
22 |
|
|
Adjusted
Gross
Income |
23 |
Educator expenses . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . |
23 |
|
|
|
|
|
| 24 |
Certain business expenses of reservists, performing
artists, and fee-basis government officials. Attach Form 2106 or
2106-EZ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . |
24 |
|
|
|
|
| 25 |
Health savings account deduction. Attach Form 8889
. . . . |
25 |
|
|
|
|
| 26 |
Moving expenses. Attach Form 3903 . . . . . . . . .
. . . . . . . . |
26 |
|
|
|
|
| 27 |
Deductible part of self-employment tax. Attach
Schedule SE |
27 |
|
|
|
|
| 28 |
Self-employed SEP, SIMPLE, and qualified plans . .
. . . . . . . . |
28 |
|
|
|
|
| 29 |
Self-employed health insurance deduction . . . . .
. . . . . . . . . |
29 |
|
|
|
|
| 30 |
Penalty on early withdrawal of savings . . . . . .
. . . . . . . . . . |
30 |
|
|
|
|
| 31a |
Alimony paid b
Recipient's SSN ? |
|
31a |
|
|
|
|
| 32 |
IRA deduction . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . |
32 |
|
|
|
|
| 33 |
Student loan interest deduction . . . . . . . . . .
. . . . . . . . . . . |
33 |
|
|
|
|
| 34 |
Tuition and fees. Attach Form 8917 . . . . . . . .
. . . . . . . . . . |
34 |
|
|
|
|
| 35 |
Domestic production activities deduction. Attach
Form 8903 |
35 |
|
|
|
|
| 36 |
Add lines 23 through 35 . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. |
36 |
|
|
| 37 |
Subtract line 36 from line 22. This is your
adjusted gross income . . . . . . . . . . . . .
. |
? |
37 |
|
|
| KIA |
For Disclosure, Privacy Act, and Paperwork Reduction
Act Notice, see separate instructions. |
|
Form 1040(2016) |
|
| Form 1040 (2016) |
LANCE |
H DEAN |
123-45-6786 |
Page 2 |
Tax and
Credits |
38 |
Amount from line 37 (adjusted gross income) . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . |
|
38 |
|
|
| 39a |
Check
if: |
{ |
? You were born before January 2, 1952, ?
Blind.
? Spouse was born before January 2, 1952, ?
Blind. |
} |
Total boxes
checked ? 39a |
|
|
|
|
|
Standard Deduction for—
• People who check any box on line 39a or 39b or
who can be claimed as a dependent, see instructions.
• All others:
Single or Married filing separately, $6,300
Married filing jointly or Qualifying widow(er), $12,600
Head of household, $9,300
|
b |
If your spouse itemizes on a separate return or you
were a dual-status alien, check here ? 39b ? . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . |
|
|
|
| 40 |
Itemized deductions (from Schedule
A) or your standard deduction
(see left margin) |
40 |
|
|
| 41 |
Subtract line 40 from line 38 . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. |
|
41 |
|
|
| 42 |
Exemptions. If line 38 is $155,650
or less, multiply $4,050 by the number on line 6d. Otherwise, see
instructions . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . |
|
42 |
|
|
| 43 |
Taxable income. Subtract line 42
from line 41. If line 42 is more than line 41, enter -0- |
43 |
|
|
| 44 |
Tax (see instructions). Check if
any from: a ? Form(s) 8814 b ?
Form 4972 c ? ___ |
|
44 |
|
|
| 45 |
Alternative minimum tax (see
instructions). Attach Form 6251 . . . . . . . . . . . . . . . .
. |
|
45 |
|
|
| 46 |
Excess advance premium tax credit repayment. Attach
Form 8962 . . . . . . . . . . . . . . . . |
|
46 |
|
|
| 47 |
Add lines 44, 45, and 46 . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. |
? |
47 |
|
|
| 48 |
Foreign tax credit. Attach Form 1116 if required . . . . . . .
. . . |
48 |
|
|
|
|
|
| 49 |
Credit for child and dependent care expenses. Attach Form 2441
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . |
49 |
|
|
|
|
| 50 |
Education credits from Form 8863, line 19 . . . . . . . . . . .
. . . |
50 |
|
|
|
|
| 51 |
Retirement savings contributions credit. Attach Form 8880 .
. |
51 |
|
|
|
|
| 52 |
Child tax credit. Attach Schedule 8812, if required . . . . . .
. . . |
52 |
|
|
|
|
| 53 |
Residential energy credit. Attach Form 5695 . . . . . . . . . .
. . . |
53 |
|
|
|
|
| 54 |
| Other credits from Form: a ? 3800
b ? 8801 c ? |
|
|
54 |
|
|
|
|
| 55 |
Add lines 48 through 54. These are your
total credits . . . . . . . . . . . . . . . . . .
. . . . . . . . |
55 |
|
|
|
56 |
Subtract line 55 from line 47. If line 55 is more
than line 47, enter -0- . . . . . . . . . . . . . |
? |
56 |
|
|
Other
Taxes |
57 |
Self-employment tax. Attach Schedule SE . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
|
57 |
|
|
| 58 |
Unreported social security and Medicare tax from
Form: a ? 4137 b ? 8919 . . . . .
. . . . |
|
58 |
|
|
| 59 |
Additional tax on IRAs, other qualified retirement
plans, etc. Attach Form 5329 if required |
59 |
|
|
| 60a |
Household employment taxes from Schedule H . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . |
|
60a |
|
|
| b |
First-time homebuyer credit repayment. Attach Form
5405 if required . . . . . . . . . . . . . . |
|
60b |
|
|
| 61 |
Health care: individual responsibility (see instructions) |
Full-year coverage ? . . . |
61 |
|
|
| 62 |
Taxes from: a ? Form 8959
b ? Form 8960 c ? Instructions;
enter code(s) _ _ _ _ _ |
|
62 |
|
|
| 63 |
Add lines 56 through 62. This is your total
tax . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . |
? |
63 |
|
|
| Payments |
64 |
Federal income tax withheld from Forms W-2 and 1099
. . . . . . |
64 |
|
|
|
|
|
| If you have a qualifying child, attach Schedule
EIC. |
65 |
2016 estimated tax payments and amount applied from
2015 return . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . |
65 |
|
|
| 66a |
Earned income credit (EIC) . . . .
. . . . . . . . . . . . . . . . . . . . |
66a |
|
|
| b |
Nontaxable combat pay election . . . . . . . . . . |
66b |
|
|
|
|
|
| 67 |
Additional child tax credit. Attach Schedule 8812 .
. . . . . . . . . . |
67 |
|
|
|
68 |
American opportunity credit from Form 8863, line 8
. . . . . . . . |
68 |
|
|
|
69 |
Net premium tax credit. Attach Form 8962 . . . . .
. . . . . . . . . |
69 |
|
|
|
70 |
Amount paid with request for extension to file . .
. . . . . . . . . . |
70 |
|
|
|
71 |
Excess social security and tier 1 RRTA tax withheld
. . . . . . . . . |
71 |
|
|
|
72 |
Credit for federal tax on fuels. Attach Form 4136 .
. . . . . . . . . |
72 |
|
|
|
73 |
| Credits from Form: a ? 2439 b
? Reserved c ? 8885 d ? |
|
|
73 |
|
|
|
74 |
Add lines 64, 65, 66a, and 67 through 73. These are
your total payments . . . . . . . . . . |
? |
74 |
|
|
| Refund |
75 |
If line 74 is more than line 63, subtract line 63
from line 74. This is the amount you overpaid . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . |
75 |
|
|
|
76a |
Amount of line 75 you want refunded to
you. If Form 8888 is attached, check here . ? |
? |
76a |
|
|
| Direct deposit? See instructions. |
? b |
| Routing number |
X |
X |
X |
X |
X |
X |
X |
X |
X |
|
? c Type: ? Checking ?
Savings |
|
|
|
|
| ? d |
| Account number |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
|
|
| 77 |
Amount of line 75 you want applied to your
2017 estimated tax ? |
77 |
|
|
|
Amount
You Owe |
78 |
Amount you owe. Subtract line 74
from line 63. For details on how to pay, see instructions . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . |
? |
78 |
|
| 79 |
Estimated tax penalty (see instructions) . . . . .
. . . . . . . . . . . |
79 |
|
|
|
| Third Party Designee |
|
Do you want to allow another person to discuss this
return with the IRS (see instructions)? ? Yes.
Complete below. ? No |
Designee's
name |
? |
Phone
no. |
? |
Personal identification
number (PIN) ? |
|
Sign
Here
Joint return? See instructions. Keep a copy for your records. |
|
Under penalties of perjury, I declare that I have
examined this return and accompanying schedules and statements, and
to the best of my knowledge and belief, they are true, correct, and
accurately list all amounts and sources of income I received during
the tax year. Declaration of preparer (other than taxpayer) is
based on all information of which preparer has any knowledge. |
| ? |
Your signature |
Date |
Your occupation
CONVENTION MANAGER |
Daytime phone number |
| Spouse's signature. If a joint return, both
must sign. |
Date |
Spouse's occupation
PARALEGAL |
If the IRS sent you an Identity Protection PIN, enter it here
(see inst.)
|
| Paid Preparer Use Only |
|
Print/Type preparer's name |
Preparer's signature |
Date |
Check ? if self-employed |
PTIN |
| Firm's name ? |
Firm's EIN ? |
| Firm's address ? |
Phone no. |
| KIA |
www.irs.gov/form1040 |
Form 1040 (2016) |
|