Question

Comprehensive Problem 2-2A Ray and Maria Gomez have been married for 3 years. Ray is a propane salesman for Palm Oil Corporation and Maria works as a city clerk for the City of McAllen. Ray's birthdate is February 21, 1991 and Maria's is December 30, 1993. Ray and Maria each received a W-2 from their respective employers (see separate tab).. Ray and Maria have interest income from McAllen State Bank which is reported a 1099-INT form (see separate tab). In addition, they own U.S. Savings bonds (Series EE). The bonds had a value of $10,000 on January 1, 2019, and their value is $10,700 on December 31, 2019. They have not made an election with respect to these bonds. Ray has an ex-wife named Judy Gomez. Pursuant to their January 27, 2014 (pre-2019) divorce decree, Ray pays her $450 per month in alimony. All payments were made on time in 2019. Judy's Social Security number is 566-74-8765. During 2019, Ray was in the hospital for a successful operation. His health insurance company reimbursed Ray $4,732 for all of his hospital and doctor bills. In June 2019, Maria's father died. Under a life insurance policy owned and paid for by her father, Maria was paid death benefits of $25,000. She used $7,800 to cover a portion of the funeral costs for her father. Maria bought a Texas lottery ticket on impulse during 2019. Her ticket was lucky and she won $4,025. The winning amount was paid to Maria in November 2019, with no income tax withheld. Palm Oil Corporation provides Ray with a company car to drive while he is working. The Corporation spent $5,000 to maintain this vehicle during 2019. Ray never uses the car for personal purposes.

Answer 1

Complete the Gomez's Form 1040. Form Department of the Treasury-Internal Revenue Service (99) 1040 U.S. Individual Income Tax Return 2018 OMB No. 1545-0074 IRS Use Only Filing status: Married filing jointly ✓ Your first name and initial Ray Last name Gomez Your social security number 469-21-5523 Your standard deduction: None If joint return, spouse's first name and initial Maria Last name Gomez Spouse's social security number 444-65-9912 Spouse standard deduction: None Yes Full-year health care coverage or exempt (see inst.) Apt. no. Home address (number and street). If you have a P.O. box, see instructions. 1610 Quince Avenue Presidential Election Campaign (see inst.) None City, town or post office, state, and ZIP code. If you have a foreign address, attach Schedule 6. McAllen, TX 78701 If more than four dependents, see inst. and ✓ here Dependents (see instructions): | (2) Social security number (3) Relationship to you Last name (1) First name Form 1040 (2018) (4) V if qualifies for (see inst.): Child tax credit Credit for other dependents Page 2 62,600 1 Wages, salaries, tips, etc. Attach Form(s) W-2 ..... Tax-exempt interest b Taxable interest 2b 650 za 3a За Qualified dividends b Ordinary dividends 3b 4a IRAs, pensions, and annuities 4a b Taxable amount | 4b Attach Form(s) W- 2. Also attach Form(s) W-2G and 1099-R if tax was withheld. 5b 5a 6 Social security benefits 5a b Taxable amount Total income. Add lines 1 through 5. Add any amount from Schedule 1, line 22 4,000 67,250 7 Adjusted gross income. If you have no adjustments to income, enter the amount from line 6; otherwise, subtract Schedule 1, line 36, from line 6 .......... 61,850 8 Standard deduction or itemized deductions (from Schedule A) ........... 24,000 9 Qualified business income deduction (see instructions) ......... 9 10 10 37,850 Standard Deduction for- • Single or married filing separately, $12,000 • Married filing jointly or Qualifying widow(er), $24,000 • Head of household, 11 Taxable income. Subtract lines 8 and 9 from line 7. If zero or less, enter - - .... a Tax (see inst) 4,164 (check if any from: 1 o Form(s) 8814 2 0 Form 4972 3 0 b Add any amount from Schedule 2 and check here ................... a Child tax credit/credit for other dependents b Add any amount from Schedule 3 and check here ....... ........... . 11 4,164 12 12

VUOVE POVO 12 a Child tax credit/credit for other dependents b Add any amount from Schedule 3 and check here ....... 12 ................ 13 Subtract line 12 from line 11. If zero or less, enter -o- ........... 13 4,164 • Head of household, $18,000 • If you checked any box under Standard deduction, see instructions. Other taxes. Attach Schedule 4. ... 14 15 Total tax. Add lines 13 and 14 ...... 15 4,164 ✓ 16 Federal income tax withheld from Forms W-2 and 1099 ............ 16 5,970 17 b Sch 8812 Refundable credits: a EIC (see inst.)_ c Form 8863 Add any amount from Schedule 5 17 18 Add lines 16 and 17. These are your total payments ........... 5,970 ✓ Refund 19 If line 18 is more than line 15, subtract line 15 from line 18. This is the amount you overpaid................................................ overpaid .. 1,806 1,806 ....... 20a Amount of line 19 you want refunded to you. If Form 8888 is attached, check here O 20a Direct deposit? b Routing number 1 c Type: Checking - Savings See instructions. d See instructions. ► d Account number TIT I TITITITI 21 Amount of line 19 you want applied to your 2019 estimated tax . . . . . . . . . . . . . ..... Account number 21 Amount 22 Amount you owe. Subtract line 18 from line 15. For details on how to pay, see Name(s) shown on Form 1040 Ray and Maria Gomez Your social security number 469-21-5523 1-9b Additional Income 10 1-9b 1-9b Reserved .. Reserved ............................................... 10 Taxable refunds, credits, or offsets of state and local income taxes ....... 11 Alimony received .......... 12 Business income or (loss). Attach Schedule C or C-EZ ... 13 Capital gain or (loss). Attach Schedule D if required. If not required, check here 11 12 13 14 Other gains or (losses). Attach Form 4797 .. 14 15a Reserved .... 15b 1 a Neserved . . . . . . . . . . . . . . . . . . . . 16a Reserved ..... 16b 17 Schedule E .. .. .. .. .. .. .. .. .. . .. .. . ... .. . 17 ... . .. .. .. .. . Rental real estate, royalties, partnerships, S corporations, trusts, etc. Attach Schedule E .. Farm income or (loss). Attach Schedule F Unemployment compensation ....... 18 18 19 19 20a 20b ZUd Reserved .... Reserved . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21 Other income. List type and amount Lottery winnings 21 4,000 ✓ 22 Combine the amounts in the far right column. If you don't have any adjustments to income, enter here and include on Form 1040, line 6. Otherwise, go to line 23 22 4,000

to Income 24 Certain business expenses of reservists, performing artists, and fee-basis government officials. Attach Form 2106 . Health savings account deduction. Attach Form 24 100 .. . . .. . .. . . .. . 25 0009 IIIIIIIIIIIIIIIIIIIIIIIII... 25 26 Moving expenses for members of the Armed h Form 3903. 26 27 Schedule Se........................ 27 Deductible part of self-employment tax. Attach Schedule SE Self-employed SEP, SIMPLE, and qualified plans Self-employed health insurance deduction .... 28 29 28 29 30 30 Penalty on early withdrawal of savings .... 31a Alimony paid b Recipient's SSN ► 566-74-8765 31a 5,400 32 IRA deduction 32 33 Student loan interest deduction ......... 33 34 Reserved .......................... 34 35 Reserved.......................... 35 36 Add lines 23 through 35 ...... 36 5,400