Assignment – Assisting a Family With Their Tax Returns
Imagine that you are preparing taxes for a local tax service provider.
Overview
A married couple named Judy and Walter Townson have come to you to seeking assistance with their federal income taxes.
During your meeting with the Townson’s, you gather the following information:
⦁ They are both 55 years of age.
⦁ They have two daughters and one son.
⦁ One daughter (age 25) is married with children.
⦁ One daughter (age 20) is living at home and attending college.
⦁ Their son (age 16) is a junior in high school.
⦁ They are currently paying for their college-student daughter to attend school full time.
⦁ Judy is employed as a teacher and makes $60,000 a year. She used $500 of her personal funds to purchase books and other supplies for her classroom.
⦁ Walter is employed as a CPA and makes $100,000 a year.
⦁ They provided you a 1099-INT which reported $4,500 in interest, of which $500 was savings bond interest.
⦁ They provided you a 1099-DIV which reported $300 in dividends.
⦁ They received a state tax refund last year of $385.
⦁ They provided you a list of expenses including:
⦁ Doctor’s bills, $800.
⦁ Prescriptions, $400.
⦁ New glasses, $2,000.
⦁ Dental bills, $560.
⦁ Braces, $5,000.
⦁ Property taxes for their two cars of $800, which included $50 in decal fees (tabs).
⦁ Real estate taxes of $4,500.
⦁ Mortgage interest of $12,000.
⦁ Gifts to charities, $1,000.
⦁ GoFundMe contribution to a local family in need, $100.
⦁ Tax preparation fees for last year’s taxes, $400.
Instructions
Consider the most beneficial way for Judy and Walter to file their federal income tax return.
Prepare a brief written summary, no more than 500 words that address the following:
⦁ Estimated taxable income for Judy and Walter (please show computations).
⦁ Summary of tax return, including any suggestions or tax planning considerations.
⦁ Explain how you determined the filing status, dependents, and use of standard/itemized deduction.
This course requires the use of The Schools Writing Standards. For assistance and information, refer to the Schools Writing Standards link in the left-hand menu of your course. Check with your professor for any additional instructions.
The specific course learning outcome associated with this assignment:
⦁ Complete a tax analysis that is informed by tax law and strategies to determine the most beneficial way for a client/family to file their federal income tax return.
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