Week 6 Assignment – Assisting a Family With Their Tax Returns
Imagine that you are preparing taxes for a local tax service provider.
Overview
A married couple named Judy and Walter Townson have come to you to seeking assistance with their federal income taxes. During your meeting with the Townson’s, you gather the following information:
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 (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.
This course requires the use of The Schools Writing Standards. For assistance and information, please refer to the Schools Writing Standards link in the left-hand menu of your course.
Check with your professor for any additional instructions.
The specific course learning outcome associated with this assignment:
Complete a tax analysis that is informed by tax law and strategies to determine the most beneficial way for a client/family to file their federal income tax return.
Notes:
How you took info from client and prepared their tax computations from it, show if there’s income, etc. Line by line what you’ve included to come up with their taxable income. Don’t show summary of taxable income. You can put into table to show how you determine the taxable income. Need to show depth and the detail behind your answer.
Also, identify then the summary of that, including any suggestions or tax planning considerations. Look at their tax situation, knowing what you do from the information they provided here, and identify suggestions or planning items that you could share with your client for their next taxable year. There may be certain questions you need to ask them to collect more information.
Identify those questions. Dig a little deeper into the clients tax situation and figure out areas that you can suggest for them on how they can improve their tax situation next year. Lastly, as you’re coming up with the taxable income for this client, you need to identify how you determine the filing status based on the information you have, how you determine the dependents.
Don’t just identify how many dependents they have, identify how you came up with that number and what a dependent, a dependent. And then the use of standard versus itemized deductions. Figure out in this scenario whether it’s better for your client to use a standard deduction or the itemized deduction. Show how you came up with that analysis.
Don’t just identify that one is better than the other. Show comparisons with what the differences are between those two deductions and why you chose what you did. Based on what you’re told about the children, are they dependents or not. If you feel like you need more information, make sure to include that in the paper.
The School’s Writing Standards:
Essay/Paper Checklist
Design
Include page numbers.
Use 1-inch margins.
Use numerals (1, 2, 3, and so on) or spell out numbers (one, two, three, and so on).
Double space body text in the assignment.
Use consistent 12-point font.
Use section headings to divide separate content areas. Center the section headings on the page, be consistent, and include at least two section headings in the assignment.
