Question

Dave Stevens, age 34, is a self-employed physical therapist. His wife Sarah, age 31, teaches English as a Second Language at a local language school. Dave’s Social Security number is XXXXX Sarah’s Social Security number is XXXXX Sarah and Dave have three children—Andrew, age 8; Isaac, age 6; and Mira, age 3. The children’s Social Security numbers are, respectively, XXX-XX-XXXX, XXX-XX-XXXX, and XXX-XX-XXXX. They live at 12637 Pheasant Run, West Bend, Oregon 74658. They paid $8,900 in qualified residence interest and $2,400 in property taxes on their home. They had cash charitable contributions of $14,000. They also paid $180 to a CPA for preparing their federal and state income tax returns for the prior year, $100 of which was for the preparation of Dave’s Schedule C. Sarah and Dave earned interest on CDs of $3,200. Sarah’s salary for the year is $32,000, from which $9,600 in federal income tax and $1,400 in state income tax were withheld. Dave’s office is located at Suite 402,XXXXX Portland, Oregon 74624, and his employer ID number is XXXXX Dave has been practicing for four years, and he uses the cash method of accounting. During the current year, Dave recorded the following items of income:

Revenue from patient visits $300,000
Interest earned on the office checking balance 225

The following expenses were recorded on the office books:
Property taxes on the office $ 4,500
Mortgage interest on the office 12,000
Depreciation on the office 4,500
Malpractice insurance 37,500
Utilities 3,750
Office staff salaries 51,000
Rent payments on equipment 15,000
Office magazine subscriptions 150
Office supplies 24,000
Medical journals 330

Dave pays $50 annually for use of a safety deposit box to store certain confidential documents related to his business. In addition to his medical practice, Dave spends 15 hours every week managing his real estate investments. To make sure he is aware of all current investment strategies and best practices, he subscribes to the following journals:

Wall Street Journal $150
U.S. News & World Report 55
Money Magazine 45
Dave also paid $30,000 in estimated federal income taxes. Prepare Dave and Sarah’s tax return (Form 1040, Schedules A, B, C, and SE) for the current year. Disregard any tax credits for which they may be eligible.

The tax return uses the forms from 2018, ive been at it for 3 hours and I cannot figure out. Any help would be appreciated, thank you

Answer 1

Hello, I presume this is for year 2011.

I can give you the line #s for the returns and the amounts.

Schedule B has $3200 on lines 1, 2, and 4, this will go on 8a of the 1040A.

Schedule C:

Check cash method on line F.

Line 1b = 300,000 (also 1d, 3 and 5)

Line 6 = 225

Line 7 = 300225

Line 13 = 4500

Line 15= 37500

Line 16a 12000

Line 17= 100 (tax prep fee for professional part)

Line 18 = 24150

Line 20a = 15000

Line 23= 4500

Line 25 = 3750

Line 26 = 51000

Line 27a = 380 (from medical pubs and safe deposit box entered on 2nd page part V line 48)

Line 28= 152880

Line 29 = 147345

Line 31 = 147345

Line 31 carries to line 12 on the 1040 and line 2 on Sched SE

Sched SE

Lines 2 and 3 = 147345

Line 4=136073

Line 5=15053

Line 6=8594

Schedule A=

Line 5=1400

Line 6=2400

Line 9=3800

Line 10 and 15 = 8900

Line 16 and 19 = 14000

Line 22=80

Line 23=250

Line 24=330

Line 26=3479

Line 27 = 0

Line 29= 26700

Form 1040--

Line 7 = 32000

Line 8a = 3200

Line 12 = 147345

Line 22 = 182545

Line 27 and 36=8594

Line 37 = 173951

Line 38 = 173951

Line 40=26700

Line 41= 147251

Line 42=18500

Line 43=128751

Line 44=24438 (from tax computation worksheet)

Line 46=24438

(Child tax credit not allowed (income too high)

Line 55=24438

Line 56=15053

Line 61=39491

Line 62=9600

Line 63=33000

Line 72=42600

Line 73= 3109

Client gets a nice refund!!!

Please let me know if you need clarification.