Project Two Module 7 Tax Planning

ACC330ClientTaxProfilesBDescriptions.docx

Home >Business & Finance homework help >Accounting homework help >Project Two Module 7 Tax Planning

ACC 330 Client Tax Profiles B Description 2 Clients for Tax Planning Scenario – Set 1 Schedule C and estimated Tax Payments 2 Tax Planning Scenario 1 3 Clients for Tax Planning Scenario – Set 2 Education Credits 3 Tax Planning Scenario 2 4 Clients for Tax Planning Scenario – Set 3 MFS Standard versus Itemized Deductions 4 Tax Planning Scenario 3 5 Clients for Tax Planning Scenario – Set 4 IRA Contributions 6 Tax Planning Scenario 4 7 Clients for Tax Planning Scenario – Set 5 Bunching Deductions 7 Tax Planning Scenario 5 8

ACC 330 Client Tax Profiles B Description

Note: There are five sets of client data contained in this Client Tax Profile document. Each set represents a category within tax planning, such as Set 2 Education Credits. To show how each category may be applied to clients, there are two client profiles within each category that provide different tax scenarios. This allows you to compare two client scenarios withing a single category of tax planning. The words category and scenario are used interchangeably in this assignment.

Important: This profile collection will be used in Module Six Case Study and will focus on a single category for Project Two in Module Seven.

Review each of these scenarios completely by opening their corresponding Form 1040 tax returns. They are linked to the client profile. These clients have each asked for ways to reduce their tax liability.

Clients for Tax Planning Scenario – Set 1 Schedule C and estimated Tax Payments

Tax Planning Scenario – Schedule C and Estimated Tax Payments
Client(s) #1	Client(s) #2
Open Client 1040	1142	Open Client 1040	1143
Primary Taxpayer’s Legal Name	Joanna Roman	Primary Taxpayer’s Legal Name	Malik Ali
Primary Taxpayer’s Preferred Pronoun	She	Primary Taxpayer’s Preferred Pronoun	He
SSN	*--1142	SSN	*--1143
Age	25	Age	71
Occupation	Gig Worker	Occupation	Gig Worker
Citizen/U.S. Resident Status	U.S. Permanent Resident	Citizen/U.S. Resident Status	U.S. Citizen
Languages	English; Italian	Languages	English
Marital Status	Single	Marital Status	Single
Spouse’s Legal Name	N/A	Spouse’s Legal Name	N/A
Spouse’s Preferred Pronoun	N/A	Spouse’s Preferred Pronoun	N/A
Spouse’s SSN	N/A	Spouse’s SSN	N/A
Spouse’s Age	N/A	Spouse’s Age	N/A
Spouse’s Occupation	N/A	Spouse’s Occupation	N/A
Dependent(s) (# - Relationship) (Name/Age/SSN)	N/A	Dependent(s) (# - Relationship) (Name/Age/SSN)	N/A
Additional information:	Additional information:
· Joanna is a designer who makes one-of-a-kind clothing. She sells her designs on Etsy, at local consignment shops, and at festivals. · Her pieces are handmade and only made once. She does not repeat designs, so all pieces are original. She does not maintain any inventory. · This was the first year that Joanna made a profit, as sales increased tremendously after her social media pages grew more popular. · She has been tracking her expenses using a spreadsheet and has spent time researching items she can deduct as business expenses, but because she was so busy, she thinks that she forgot to track some expenses that would be deductible for future years.	· Malik retired three years ago and has been collecting Social Security and taking required minimum distributions from his retirement account with Fidelity. · He paid $1,785 in Medicare premiums and $255 for Part D premiums (prescription drug plan). · He recently started driving for Uber. He has found he enjoys talking to his customers and driving around his town when he has time to spare. · He reported income earned from driving for Uber and the related mileage expense that is tracked in the app. · He added a few additional expenses that he incurred as well. · When he was fully retired, he only reported his retirement income and was sometimes not required to file. He noticed that he is now required to file to report this part-time income and owed taxes.
Tax Planning Scenario 1 These clients have each asked for ways to reduce their tax liability and are interested in knowing what additional deductions they can take to reduce their net income earned from their self-employed income. They are also wondering if they should make estimated tax payments because they read that if they continue to owe taxes each year that they might be subject to penalties.

Clients for Tax Planning Scenario – Set 2 Education Credits

Tax Planning Scenario – Education credits
Client(s) #1	Client(s) #2
Open Client 1040	1129	Open Client 1040	1132
Primary Taxpayer’s Legal Name	Trilby Keller	Primary Taxpayer’s Legal Name	Robert James
Primary Taxpayer’s Preferred Pronoun	She	Primary Taxpayer’s Preferred Pronoun	He
SSN	*--1129	SSN	*--1132
Age	47	Age	48
Occupation	Accounting Manager	Occupation	Psychologist
Citizen/U.S. Resident Status	U.S. Citizen	Citizen/U.S. Resident Status	U.S. Citizen
Languages	English	Languages	English
Marital Status	Married	Marital Status	Married
Spouse’s Legal Name	David Keller	Spouse’s Legal Name	Nora James
Spouse’s Preferred Pronoun	He	Spouse’s Preferred Pronoun	She
Spouse’s SSN	*--1130	Spouse’s SSN	*--1133
Spouse’s Age	53	Spouse’s Age	48
Spouse’s Occupation	Bookstore manager	Spouse’s Occupation	Office Manager
Dependent(s) (# - Relationship) (Name/Age/SSN)	1 – Son; Wyatt Keller (Age 22) (*--1131)	Dependent(s) (# - Relationship) (Name/Age/SSN)	2 - Sons; Kris James (Age 18) (*--1134); Nolan James (Age 18) (*--1135)
Additional information:	Additional information:
· This year was Wyatt’s fourth year in college. · Next year, he is considering moving onto his master's degree. The Kellers have claimed the American Opportunity Credit for Wyatt for four years. · The Kellers anticipate paying Wyatt’s qualified education expenses towards his master's degree program next year. · Wyatt will remain a full-time student and the Kellers provide full support to Wyatt while he is enrolled in school.	· Kris and Nolan are twins who will begin attending the local community college in the Fall. · The James’s plan is to support both children financially through the next four years while attending school. · They have already started to accumulate expenses as they prepare to send both children off to school, such as application fees, new computers, and repairs to their cars to make sure they will not encounter issues with car troubles while away at school.
Tax Planning Scenario 2 These clients are each concerned with reducing their tax liability and are interested in knowing what amount of education tax credits will be available to them for their college-age children next tax year.

Clients for Tax Planning Scenario – Set 3 MFS Standard Versus Itemized Deductions

Tax Planning Scenario – MFS Standard Deduction Versus Itemized Deductions
Client(s) #1	Client(s) #2
Open Client 1040	1136	Open Client 1040	1137
Primary Taxpayer’s Legal Name	Kai Lee	Primary Taxpayer’s Legal Name	Albert Lee
Primary Taxpayer’s Preferred Pronoun	She	Primary Taxpayer’s Preferred Pronoun	He
SSN	*--1136	SSN	*--1137
Age	63	Age	64
Occupation	Bank Manager	Occupation	Inventory Manager
Citizen / U.S. Resident Status	U.S. Citizen	Citizen / U.S. Resident Status	U.S. Citizen
Languages	English; Thai	Languages	English / Thai
Marital Status	Married	Marital Status	Married
Spouse’s Legal Name	Albert Lee	Spouse’s Legal Name	Kai Lee
Spouse’s Preferred Pronoun	He	Spouse’s Preferred Pronoun	She
Spouse’s SSN	*--1137	Spouse’s SSN	*--1136
Spouse’s Age	64	Spouse’s Age	63
Spouse’s Occupation	Inventory Manager	Spouse’s Occupation	Bank Manager
Dependent(s) (# - Relationship) (Name/Age/SSN)	N/A	Dependent(s) (# - Relationship) (Name/Age/SSN)	N/A
Additional information:	Additional information:
· Kai and Albert are married but separated at this time. They remain cordial and plan to stay married for now, filing separately for the next few years. · Kai is living with her sister and does not own any property other than the home previously shared with Albert. Kai no longer contributes to the expenses required to maintain their home. · Kai does not anticipate any changes to her current income or deductions. · Filing separately, Albert took itemized deductions, which caused Kai to have to do the same in the same tax year.	· Kai and Albert are married but separated at this time. They remain cordial and plan to stay married for now, filing separately for the next few years. · Albert has incurred additional medical expenses in recent years. · Albert retained ownership of the home he and Kai shared and is paying the mortgage and real estate taxes. · Albert anticipates the same expenses to be incurred next tax year and no changes to his current income.
Tax Planning Scenario 3 These clients have asked whether they should take the Standard Deduction or itemize their deductions next year to save more tax collectively. They are curious about whether they can continue filing separately even though they are still married and what the downfalls of filing separately might include.

Clients for Tax Planning Scenario – Set 4 IRA Contributions

Tax Planning Scenario – IRA Contributions
Client(s) #1	Client(s) #2
Open Client 1040	1138	Open Client 1040	1139
Primary Taxpayer’s Legal Name	Carlos Quintero	Primary Taxpayer’s Legal Name	Daniel Hoffman
Primary Taxpayer’s Preferred Pronoun	They/Them	Primary Taxpayer’s Preferred Pronoun	He
SSN	*--1138	SSN	*--1139
Age	41	Age	39
Occupation	Dentist	Occupation	Firefighter
Citizen/U.S. Resident Status	U.S. Citizen	Citizen/U.S. Resident Status	U.S. Citizen
Languages	English; Spanish	Languages	English
Marital Status	Single	Marital Status	Married
Spouse’s Legal Name	N/A	Spouse’s Legal Name	Jacinta Hoffman
Spouse’s Preferred Pronoun	N/A	Spouse’s Preferred Pronoun	She
Spouse’s SSN	N/A	Spouse’s SSN	*--1140
Spouse’s Age	N/A	Spouse’s Age	43
Spouse’s Occupation	N/A	Spouse’s Occupation	Art Gallery Manager
Dependent(s) (# - Relationship) (Name/Age/SSN)	N/A	Dependent(s) (# - Relationship) (Name/Age/SSN)	1 – Daughter; Cristina Hoffman (Age 8) (*--1141)
Additional information:	Additional information:
· Carlos moved to Alaska to assist in an upcoming dental office that is servicing the local community. · They agreed to take a reduced salary for the initial year but anticipates nearly doubling his salary in the years ahead. · Their current employer does not offer any retirement benefits, so they contributed $6,000 to a traditional IRA this year. · Their employer told him they plan to start offering a 401(k) next year. Carlos wishes to contribute $6,000 to his traditional IRA next year.	· Daniel works full time as a firefighter for the local fire department. · He also has a side business conducting obedience training for dogs. His employer offers full benefits, such as healthcare, retirement, and vacation time off. · Jacinta’s employer does not offer any employee benefits. She would like to contribute more to her existing retirement account, a traditional IRA she established at her former employer. · Jacinta also plans to reduce her hours at the art gallery to part time. · Next year, Cristina will no longer be attending the daycare center as Jacinta will be working part-time so no childcare expenses will be incurred.
Tax Planning Scenario 4 These clients have each asked for ways to reduce their tax liability and are interested in knowing whether contributions to a traditional IRA would be tax deductible.

Clients for Tax Planning Scenario – Set 5 Bunching Deductions

Tax Planning Scenario – Bunching Itemized Deductions
Client(s) #1	Client(s) #2
Open Client 1040	1124	Open Client 1040	1125
Primary Taxpayer’s Legal Name	Tavaris Johnson	Primary Taxpayer’s Legal Name	Juliana Romero
Primary Taxpayer’s Preferred Pronoun	He	Primary Taxpayer’s Preferred Pronoun	She
SSN	*--1124	SSN	*--1125
Age	38	Age	62
Occupation	Steel Mill Worker	Occupation	Part-time Bookkeeper
Citizen/U.S. Resident Status	U.S. Citizen	Citizen/U.S. Resident Status	U.S. Citizen
Languages	English	Languages	English, Italian
Marital Status	Single	Marital Status	Single
Spouse’s Legal Name	N/A	Spouse’s Legal Name	N/A
Spouse’s Preferred Pronoun	N/A	Spouse’s Preferred Pronoun	N/A
Spouse’s SSN	N/A	Spouse’s SSN	N/A
Spouse’s Age	N/A	Spouse’s Age	N/A
Spouse’s Occupation	N/A	Spouse’s Occupation	N/A
Dependent(s) (# - Relationship) (Name/Age/SSN)	N/A	Dependent(s) (# - Relationship) (Name/Age/SSN)	N/A
Additional information:	Additional information:
· Tavaris donated $4,500 in charitable contributions last year but noticed they were not listed on the current year tax return. · He plans to contribute the same amount in charitable contributions next year but considered donating two years of his typical donation in the same tax year to help reduce his tax liability. · He expects no other changes to his income sources or deductions.	· Juliana donated $3,500 in charitable contributions last year. · She mentioned that she typically pays her annual charitable contribution in December of the year. · She was interested in paying next year’s contribution early and is considering sending in two annual contributions in the same tax year. · Juliana also shared with you that she will be incurring the following additional medical expenses next year: · Doctor co-pay: $40 per visit (once per week) · Dental procedures expected: $750 (quote received) · Prescriptions: $175 per month · Over-the-counter supplements: $1,250 · Makeup and toiletries: $600 · Insurance premium for additional vision plan: $20 a year · Spa visit: $120 · Hospital bills (payment plan): $250 per month ($3,000 total) · Mileage: Her doctor’s office is 15 miles from her home one way.
Tax Planning Scenario 5 These clients have each asked for ways to reduce their tax liability and are interested in knowing if they would benefit from bunching their itemized deductions into one tax year.

Project Two Module 7 Tax Planning

image1.png