(answered) – 1 TAX RETURN PROJECT ACCT 323 Section 5115 January 2016 Scenario:DescriptionSolution downloadThe Question1TAX RETURN PROJECTACCT 323 Section 5115January 2016Scenario:Assume that the taxpayers, Jim B. Baldwin (social security number 333-33-3330) and Sara M.Baldwin (social security number 444-44-4440) file a joint return. Both are 50 years old, havegood eyesight, and live with their three children, Ned, Joseph and Megan, at 789 N. Code Drive,Chicago, Illinois 60699, (312) 679-9999. Mr. Baldwin wants to contribute $3 of his income taxto the Presidential Election Campaign Fund. Mrs. Baldwin elects not to contribute.The Baldwins? son, Ned, is a junior in college and he is 20 years old. He worked during thesummer and earned $4,000. Their other son, Joseph, is a 17-year old high school student. Heearned $3,600 during the summer and worked part-time during the remainder of the year. Neitherson had any additional income. Their daughter, Megan, is eight years old and an elementaryschool student. She had no earned or unearned income during the year. In August, the Baldwinspaid $4,000 in tuition for their son, Ned, for the academic period that started in September. Ned?ssocial security number is 300-11-0001, Joseph?s social security number is 300-22-0002, andMegan?s social security number is 300-33-0003.The Baldwins claim Mrs. Baldwin?s mother, Julia D. Major, as a dependent under a multiplesupportagreement. The total support of Mrs. Major is $6,000, received from the following threesources:(1) $3,000 from Sara Baldwin,(2) $1,000 from another daughter, Tina Major, and(3) $2,000 in social security benefits.Mrs. Julia D. Major lived with the Baldwins during all of 2015. Her social security number is400-44-0004. Tina Major provides the Baldwins with a written, signed statement, that she willnot claim her mother as a dependent in 2015. Tina Major lives at 1425 S. 62nd Street, Chicago,IL 60699, and her social security number is 500-55- 0005.The Baldwins use Pat Berg, a professional tax preparer, to prepare their income tax return. TrishFord?s PTIN is P98756432, and she works for E&Z Tax Preparation (EIN #36-0987456), whichis located in a nearby suburb of Middle America (telephone number 1-312-555-4010). However,the Baldwins do not authorize her to discuss their return with the IRS.INCOME AND EXPENSES GENERALLYDuring 2015, Mrs. Baldwin was employed as a salesperson by a publishing company. Her FormW-2 for 2015 reports the following:Box 1. Wages, tips and other compensation $75,0002Box 2. Federal income tax withheld $ 4,950Box 4. Social security tax withheld $ 4,650Box 6. Medicare tax withheld $ 1,088Box 17. State income tax $ 2,250Mrs. Baldwin is not covered by her employer?s retirement plan. In addition, Mr. Baldwin is aself-employed individual who does not maintain a Keogh or a SEP plan. Mrs. Baldwin made a$1,500 contribution to a traditional IRA and a $2,000 contribution to a Roth IRA in 2015. Mr.Baldwin decided against making a contribution to a traditional IRA.The Baldwins received a $30 state income tax refund. They itemized in the prior year and electedto take the state income tax as a deduction. The Baldwins also received a $20 federal income taxrefund.Form 1040, Schedule AThe Baldwins made federal estimated tax payments of $2,000 for 2015. The Baldwins incurredthe following medical expenses during 2015:? prescription drugs $1,000? doctor bills $3,550? hospital bills $1,750? transportation $ 100? eyeglasses $ 500In addition, Mr. Baldwin, who is self-employed, paid $3,750 in premiums for health insurancecoverage for himself and his family. The Baldwins paid their 2008 real estate taxes of $1,810 dueon July 1, 2015. In addition, they sold their residence on September 13, 2015. They
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