Business Finance Homework Help

Note that in any case, you won’t be penalized if you need to use the forms and tables for a more recent tax year. Just make sure that the forms, instructions, and tables are consistent for one tax year.

David and Hope Smith are married and have two children, Katelyn and Cory. They all live at 134 Crystal Lake Road, New Hope, PA 18938.
The Smith family had health care coverage provided by David’s employer for the entire year of 2019.

Their Social Security numbers and other pertinent information are listed below:

Earnings

• David’s earnings and tax withholdings for 2019 can be found on his W-2.
• Hope’s earnings and tax withholdings for 2019 can also be found on her W-2.
• Hope was laid off in 2019, received $27,755 in unemployment benefits, and had $2,793 federal income tax withheld.

Federal income tax withheld

• Hope also started a small consulting business in 2019. The business classification is “Other Finance and Investment Activities.” The 2019 gross income and expenses for the business are listed below:

Gross Receipts $3,427

Expenses

Hope also drove 225 business miles and 15,000 personal miles.

Dividends and Interest Income

David and Hope received $316 in certificate of deposit interest income from Prudential and $3,328 of dividend income from Fidelity Brokerage Services, of which $2,698 was qualifying dividend income. In addition, there was $53 of capital gain distributions and $60 in foreign taxes withheld. A copy of David and Hope’s 2018 1099 INT and 1099 DIV can be found in the tax documents section below. Note: Neither David nor Hope has any interest or signatory authority over a foreign bank account. Be sure to check the correct boxes on the bottom of your Schedule B to ensure compliance.

Retirement Distributions

Hope directly rolled over $87,769.45 into a qualified IRA. A copy of her 1099-R can be found in the tax documents section.

Schedule A—Itemized Deductions

The Smith family has the following itemized deductions:

• State and Local Income Taxes—This information can be found on their W-2s. In addition, David and Hope paid an additional $172 in state taxes in 2019 for their 2018 state tax liability.
• Real Estate Taxes paid in 2019—$3,296
• Home Mortgage Interest for 2019—$4,116 (reported on Form 1098)
• Cash Contributions for 2019—$825
• Noncash Contributions for 2019—Thrift Store Value $2,625. The following information is what you will need to fill out the form for non-cash contributions.
• The contribution was on 8-12-2019.
• Date acquired—various
• How acquired—purchased
• Donor’s cost—adjusted basis—N/A

Hint: Remember to also look at the Capital Gains Dividend on Schedule 1099 DIV for 2019.

Schedule E—Rental Property

The Smiths purchased an investment rental property in 2019. Details relating to the property transaction can be found in the tax documents section. The depreciation schedule needed to calculate depreciation can be found in the tax documents section. Note: Remember to complete 8582 Passive Activity Loss Limitations.
Tax Calculation

Hint: When calculating the tax liability on line 44 of the 1040, be sure to take into consideration the qualified dividends. When you complete this project, your tax refund should be $3,756.

Best of luck, and be proud of what you’ve achieved!