TAX ASSIGN

· They are both 55 years of age.

· They have two daughters and one son.

. One daughter (age 25) is married with children.

. One daughter (age 20) is living at home and attending college.

. Their son (age 16) is a junior in high school.

· They are currently paying for their college-student daughter to attend school full time.

· Judy is employed as a teacher and makes $60,000 a year. She used $500 of her personal funds to purchase books and other supplies for her classroom.

· Walter is employed as a CPA and makes $100,000 a year.

· They provided you a 1099-INT which reported $4,500 in interest, of which $500 was savings bond interest.

· They provided you a 1099-DIV which reported $300 in dividends.

· They received a state tax refund last year of $385.

· They provided you a list of expenses including:

. Doctor’s bills, $800.

. Prescriptions, $400.

. New glasses, $2,000.

. Dental bills, $560.

. Braces, $5,000.

. Property taxes for their two cars of $800, which included $50 in decal fees (tabs).

. Real estate taxes of $4,500.

. Mortgage interest of $12,000.

. Gifts to charities, $1,000.

. GoFundMe contribution to a local family in need, $100.

. Tax preparation fees for last year’s taxes, $400.

Instructions

Consider the most beneficial way for Judy and Walter to file their federal income tax return.

Prepare a brief written summary, no more than 500 words that address the following:

· Estimated taxable income for Judy and Walter (please show computations).

· Summary of tax return, including any suggestions or tax planning considerations.

· Explain how you determined the filing status, dependents, and use of standard/itemized deduction.