Question

The client you are assigned is the Gonzales family. As an introduction to this client, your firm's tax manager tells you the following information as he hands you the client's file with all of the data... The taxpayer is self-employed, and the spouse is an employee of a university, as well as an airline company. They have three children; one is about to turn 24 and is a full-time college student, one is 23 and recently married so she is filing jointly with her husband, and one child is 15. They received interest and dividend income, they sold stock and a painting during the year, and they own rental property. They receive an education credit and a child tax credit. Because the taxpayer is self-employed, he makes estimated tax payments during the year.

Because your manager knows that you are new at tax preparation, he also wants to be sure you can think critically since robots can perform simple data entry.

After you complete the taxpayer's return, he is going to be issued a refund of $2,228. Based on the amount to be refunded, what are some key tax issues that should be considered during the next year? List at least two key tax issues and explain each.