Question

Anna Love is a tax preparer who earned a salary of $68,000 in 2018. She is 43 years old and is divorced. She received alimony of $1,500 from her former husband, Ken Love. Anna's Social Security number is 998-55-4444. Ken's is 998-88-3333 Anna and her daughter Sophia (birthdate April, 28 2000, Social Security number 888-55-2222) moved to lowa in January of this year. Anna provides more than one half of Sophia's support. They had been living in California, but Anna has always wanted to move to lowa, where her family is located. Luckily, last December (2017), a CPA position opened at a regional firm in Cedar Rapids and Anna and Sophia decided to make the move so that Anna could start work before the 2018 busy season started. They started their move on January 5, 2018. The move was expensive; it cost Anna $5,550 after all the costs were tallied up. Anna's mother was so excited to have her daughter and granddaughter move back to lowa that she gave Anna $2,000 to help out with the moving costs. Anna rented a home in California but decided to buy a home in Cedar Rapids. She found the perfect ouse at 311 Main Street, Cedar Rapids, IA 52227. Sophia completed high school in spring of 2018 she started attending school full-time at Coe College in the fall. Sophia decided to continue living at home with her mom. She was awarded a S5,000 partial tuition scholarship this year, and Anna helped by paying the remaining 51000 tuition cost. ith all the tax law changes, Anna wasn't sure if she would benefit from itemizing deductions on her tax return. However, she kept track of several expenses this year that she thought might qualify if she was able to itemize. Anna paid $4,900 in state income taxes, 55,199 in real estate taxes and 56,500 in charitable contributions during the year through payroll deduction. She paid mortgage interest of $10,000 on a principal amount of $200,000, reported to her on a 1098. She also paid the following medical-related expenses for her and Sophia: Insurance premiums Medical care expenses Prescription medicine Nonprescription medicine New cotact lenses for Sophia 3,500 $1,300 5 450 200 100 After busy season ended, Anna got distracted while driving and she ran into a street sign. The accident caused some damage to the car and gave her severe whiplash. Anna wasn't able to work for two weeks after the accident. Fortunately, she received $3,000 from her disability insurance. Her employer, Pearson and Associates, provided the policy, paying 75% of the premiums on the policy as a nontaxable inge benefit with Anna paying the remaining 25% portion as a deduction from her paycheck. n 2013, Anna acquired several investments with a portion of the divorce settlement. This year, her income from her investments included $3,200 of interest income from corporate bonds and $500 interest income from Los Angeles municipal bonds. Overall, Anna's stock portfolio appreciated by $13,000 in 2018 but she did not sell any of her stocks. Anna had S9,000 of federal income taxes withheld by her employer. Anna did not make any estimated payments. She does not want $3 to go to the Presidential Campaign Fund and she wants any refund to be sent to her in a paper check, not direct deposited. If she owes, she will mail a check to the IRS. Required Complete pages 1 and 2 of 2018 Form 1040 for Anna Love, including any required Schedules. Form 8863 is not required, but you may include it if you wish. Include a page that details any assumptions you need to make to complete the return and the calculations required. Any place on the forms that requires you to add more than one number to another to report income or deductions correctly, please show the calculations. Please label these calculations with the form and line number

Answer 1

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