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ACC INDIVIDUAL TAX RETURN PROBLEM 1 - Keith and Jennifer Hamiltons

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Question;QuestionComprehensive Tax Return ProblemsAPPENDIX CINDIVIDUAL TAX RETURN PROBLEM 1Required:Use the following information to complete Keith and Jennifer Hamiltons2011 federal income tax return. If information is missing, use reasonableassumptions to fill in the gaps.Form 1040, supporting schedules, and instructions to the forms andschedules can be found at the IRS Web site (www.irs.gov).Facts:1. Keith Hamilton is employed as an airline pilot for Flyby Airlines in Las Vegas, NV.Jennifer is employed as a teachers assistant at Small World Elementary School, inHenderson, NV. Keith and Jennifer live in a home they purchased this year. Keithand Jennifer have three children who lived with them all year, Joshua (17), Danielle(14), and Sara (10). Keith and Jennifer provided the following personal information:Keith and Jennifer do not want to contribute to the presidential election campaign.Keith and Jennifer do not claim itemized deductions.Keith and Jennifer live at 3678 Blue Sky Drive, Henderson, NV 89052.Keiths birthday is 10/12/1966 and his Social Security number is 535-22-4466.Jennifers birthday is 7/16/1969 and her Social Security number is 535-44-2255.Joshuas birthday is 6/30/1994 and his Social Security number is 454-54-5454.Danielles birthday is 8/12/1997 and her Social Security number is 343-43-4343.Saras birthday is 5/13/2001 and her Social Security number is 232-32-3232.2. Keith received the following Form W-2 for 2011 from Flyby Airlines.a Employees social security numberOMB No. 1545-0008535-22-4466Safe, accurate,FAST! UseVisit the IRS website atwww.irs.gov/efile1 Wages, tips, other compensationb Employer identification number (EIN)91-00010022 Federal income tax withheld193,645.0038,500.003 Social security wagesc Employers name, address, and ZIP codeFlyby Airlines375 West Flight Blvd.Las Vegas, NV 891194 Social security tax withheld106,800.004,485.605 Medicare wages and tips6 Medicare tax withheld208,645.003,025.357 Social security tips8 Allocated tips9d Control numbere Employees first name and initialLast name10 Dependent care benefitsSuff. 11 Nonqualified plansKeith Hamilton3678 Blue Sky DriveHenderson, NV 8905213StatutoryemployeeRetirementplan12a See instructions for box 12CodeThird-partysick payD15,00012bCode12c14 OtherCode12dCodef Employees address and ZIP code15 StateEmployers state ID numberNVForm987654321W-2Wage and TaxStatement16 State wages, tips, etc.193,645.0017 State income tax18 Local wages, tips, etc.19 Local income tax20 Locality name0.002011Department of the TreasuryInternal Revenue ServiceCopy BTo Be Filed With Employees FEDERAL Tax Return.This information is being furnished to the Internal Revenue Service.C-1spi25788_appc_C01-027.indd Page 10/04/12 4:33 PM user-f499spi25788_appc_C01-027.indd Page 2 10/04/12 4:33 PM user-f499C-2/208/MH01771/spi25788_disk1of1/0078025788/spi25788_pagefiles/208/MH01771/spi25788_disk1of1/0078025788/spi25788_pagefilesAppendix C3. Jennifer received the following Form W-2 for 2011 from Small World ElementarySchool.a Employees social security numberOMB No. 1545-0008535-44-2255b Employer identification number (EIN)Safe, accurate,FAST! UseVisit the IRS website atwww.irs.gov/efile1 Wages, tips, other compensation91-00010032 Federal income tax withheld36,8255,524.003 Social security wagesc Employers name, address, and ZIP codeSmall World Elementary School333 Tiny Tot LaneHenderson, NV 890534 Social security tax withheld39,8251,672.655 Medicare wages and tips6 Medicare tax withheld39,825577.467 Social security tipsd Control number8 Allocated tips9e Employees first name and initialLast name10 Dependent care benefitsSuff. 11 Nonqualified plansJennifer Hamilton3678 Blue Sky DriveHenderson, NV 8905213StatutoryemployeeRetirementplan12a See instructions for box 12CodeThird-partysick payD3,00012bCode12c14 OtherCode12dCodef Employees address and ZIP code15 StateEmployers state ID numberNVForm123456789W-2Wage and TaxStatement16 State wages, tips, etc.36,82517 State income tax18 Local wages, tips, etc.19 Local income tax20 Locality name0.002011Department of the TreasuryInternal Revenue ServiceCopy BTo Be Filed With Employees FEDERAL Tax Return.This information is being furnished to the Internal Revenue Service.4. During 2011, Keith and Jennifer received $550 in interest from Las Vegas citybonds, $1,070 interest from U.S. Treasury bonds, and $65 from their savingsaccount at SCD Credit Union. Keith and Jennifer are joint owners of the LasVegas city bonds and the U.S. Treasury bonds. They have a joint savingsaccount at SCD Credit Union.5. On January 21, 2011, Jennifer was involved in a car accident. Because the otherdriver was at fault, the other drivers insurance company paid Jennifer $1,350for medical expenses and $300 for emotional distress. She received payment onMarch 15, 2011.6. Keiths father died on November 15, 2010. Keith received a $100,000 deathbenefit from his fathers life insurance policy on February 8, 2011.7. On February 15, 2011, Keith hurt his arm on a family skiing trip in Utah andwas unable to fly for two weeks. He received $4,000 for disability pay fromhisdisability insurance policy. He received the check on March 2, 2011. Thedisability insurance policy premiums are paid for by Flyby Airlines as a fullytaxable fringe benefit to Keith (the premiums paid on his behalf are includedinKeiths compensation amount on his W-2). Flyby Airlines paid $600 in premiums on this policy during 2011.8. Jennifers grandmother died on March 10, 2011, leaving Jennifer with aninheritance of $30,000. (She received the inheritance on May 12, 2011.) FlybyAirlines had space available on its Long Island, NY, flight and provided Keith,Jennifer, and their three children with free flights so they could attend thefuneral. The value of the airfare was $5,284.9. On April 1, 2011, Jennifer slipped in the Small World Elementary lunchroom,and injured her back. Jennifer received $1,200 in workers compensation benefits because her work-related injury caused her to miss two weeks of work.Shealso received a $2,645 reimbursement for medical expenses from the healthinsurance company. Small World Elementary pays the premiums for Jennifershealth insurance policy as a nontaxable fringe benefit.spi25788_appc_C01-027.indd Pagespi25788_appc_C01-027.indd Page 34/10/124/10/1210:38 AM user-f49410:38 AM user-f494/208/MH01771/spi25788_disk1of1/0078025788/spi25788_pagefiles/208/MH01771/spi25788_disk1of1/0078025788/spi25788_pagefilesAppendix C10. On May 17, 2011, Keith and Jennifer received a federal income tax refund of$975 from their 2010 federal income tax return.11. On June 5, 2011, Keith and Jennifer sold their home in Henderson, NV, for$510,000 (net of commissions). Keith and Jennifer purchased the home elevenyears ago for $470,000. On July 12, 2011, they bought a new home for $675,000.12. On July 25, 2011, Keiths aunt Beatrice gave Keith $18,000 because she wantedto let everyone know that Keith is her favorite nephew.13. On September 29, 2011, Jennifer won an iPad valued at $500 in a raffle at theannual fair held at Joshuas high school.

 

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