Question;2013 income tax informationDavid P. and Karen M. Stevens are married and file a joint income tax return. Their social security numbers are 133-99-4444 and 144-33-3333, respectively. They have two children, a son named Paul A. Stevens, age 14, social security number 132-99-6565 and a daughter, Anne M. Stevens, age 10, social security number 132-88-5656. David and Karen have been married for 16 years and purchased their current home in 2003. The family lives at 1075 Jackson Drive in Coastal City, GA 31133.Karen is a college professor employed by a university. David is a pediatrician. He is selfemployed and leases office space in a medical building near the local hospital. David and Karen report their income using the cash method.Karen is covered by a qualified retirement plan through her work. She partcipates in a group health insurance plan that covers all four members of the family. The health insurance plan for David's medical practice covers only the full-time receptionist.Income and expense information:Karen's salary (reportable W-2 amount)96,000David's medical practice:Gross receipts287,000Interest income on business account **789Expenses on office books:Attorney's fees1,000Business license400Contract labor2,200Country club dues paid by practice4,200County property taxes on office furnishings, computersystem, and other equipment600Depreciation on office furnishings & equipment4,615Health insurance for receptionist5,275Malpractice insurance26,000Payroll taxes2,988Professional journals and literature2,160Receptionist's salary31,000Rent - office24,000Repairs and maintenance1,400Utilities9,650Contribution to lobbying group representing doctors1,450**report interest on the schedule for interest IncomeOther income and deductions:Dividends reported by brokerage account at Merrill Jones.Total ordinary dividends of $4,640, of which $4,400 are qualifiedThe dividends were paid by U.S. corporations operating domestically.Sale of land held for investment:Sold: 9/30/2013 Sales price102,000Acquired: 08/15/2006 Cost99,600The land was not used in a trade or business by the taxpayers.The sales was reported on a Form 1099-B that does not disclosethe basis of the property.Sale of stock in ABC Bank, Inc.Sold: 03/03/2013 Sales price14,000Acquired: 09/30/2005 Cost15,750Form 1099-B reported the sales proceeds also discloses the basis.There is a short-term loss of $2,970 carried over from the 2012 return.Interest income on family savings account at My Bank,1,820Inc.Medical expenses incurred during 2013 that were not reimbursedby insurance:Doctors and dentists6,210Hospital12,085Contact lenses and glasses820Real estate taxes on personal residence5,070Home mortgage interest expense13,760Charitable contributions paid by check:Church8,800United Way400Red Cross200Individual retirement acccount contribution - David5,000Contribution is made to a traditional IRA.Accounting fees paid in April 2013 for the preparation ofthe couple's 2012 income tax returns. 65% of the feesare attributable to David's medical practice.1,400Income taxes paid:Karen had the following 2013 income taxes withheld from her salary.Federal17,800State3,000The balance due on the couple's state income tax return for 2012was $720. The balance was paid in April of 2013 when the returnwas filed.FederalState2013 estimated taxes paid by David:4/15/20139,3006/15/20139,3009/15/20139,3001/15/20149,300Other information:Assume that David and Karen are not subject to alternative minimum tax.Do not prepare Form 6251 as part of the return.David and Karen's 2012 federal tax was $54,000. They should not be subject topenalty for underpayment of estimated tax, even if additional tax is owed withthe return.David's office address: 1600 Hospital Bouldvard, Suite 550Coastal City, GA 31133David's business employer identification number:58-4443355Business name: Psychiatric ClinicYou are not required to complete Form 4562 (depreciation expense form) for1,0001,0001,0001,000the medical practice. Form 4562 is not required if there are no assets placed inservice during the current taxable year. You may enter the depreciation expensefor continuing assets on the forms reporting the medical practice income.
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